Trading is not a game of exacts. Perfectionists need not apply. Markets are made up of many irration...
06/13/2003 12:00 am EST
"Commodities, and in particular gold, in my own view, will provide the fresh leadership needed for more explosive small-stock gains," says Thom Calandra, editor of The Calandra Report and columnist for CBS Marketwatch.com. "Those gold gains, I think, will come alongside turbulence for America's big-cap stocks, the S&P 500 crowd whose shares sell for 30 times profits. Three gold companies I personally expect to double their stock prices, and double them again as the gold price sweeps far past $400 an ounce this year, are Iamgold (IAG NYSE), Crystallex International (KRY NYYSE) and Wheaton River Minerals (WHT NYSE)."
"Now that Alan Greenspan has hinted at the possibility of yet another interest rate cut, the time has come to exercise our money market alternatives. So, I'm recommending that you allocate one-third of your excess funds to the Dreyfus Short-Intermediate Government Fund (DSIGX). Options for those of you who don't have access to this no-transaction fee fund are: Fidelity Ultra-Short Bond (FUSFX) or Vanguard Short-Term Federal Fund (VSGBX). The year-to-date return for the Dreyfus Gov't bond fund is 2.47%. Our goal is to capture 1% to 4% in the next few months with this position. We plan on staying put for at least 90 days (to avoid short-term redemptions)."
"There has not been a noticeable, sharp decline in put volume (people abandoning puts in favor of calls), which is what you would expect to see if we were at a top, says Mike Norman, editor of The Economic Contrarian. "The put/call ratio's ambivalence is causing me to stick with my view that this is not the top. Corrections are likely to be short-lived, and I would expect to see the S&P 500 above 1,000 soon. Look at the relentless march lower in rates even in the face of higher stocks and improving economic data. It is being driven purely on the belief that the Fed will continue to cut. But what happens if, at some point, it is forced to change its stance? Then a major crime of passion will play itself out in the Treasury market. There will be a collapse that will make the 1994 'adjustment' look like kid's play. There's going to be a stampede out of bonds and into stocks. And you know what? At that point we will be selling. For now, we are holding positions in the following US technology stocks: Dell (DELL NASDAQ), TechData (TECD NASDAQ), IBM (IBM NYSE), Ingram Micro (IM NYSE), Neoware Systems (NWRE NASDAQ), and Pall Corp. (PLL NYSE)."
"We believe a correction will last at a minimum for several weeks, which will turn several of our intermediate-term indicators lower--which of course suggests an intermediate-term top," notes Richard Rhodes, editor of The Rhodes Report. "However, we aren't as naive to believe that another test of the highs will not materialize. If it does, it shall be the perfect time to enter short positions, and thus we shall do so in our Trading Portfolio in the coming days. Our choices for doing so will be Federal Express (FDX NYSE), CheckFree (CKFR NASDAQ), and Symantec (SYMC NASDAQ)--and we shall look for something on the order of a 10% decline in the overall major averages.""The entire rally has been led by biotech, high-tech, and Internet stocks and reeks with the same stench of 2000," technical trader. Mark Leibovit, editor of the daily online VRTrader and the exclusive VR Platinum Portfolio. "Is this time different? Is this another new algorithm of illogic or is this simply a manipulation on the grandest scale directed to engulf the world in the deception of growing positive economics and the need to re-elect a current administration? I am convinced that analysts have been 'told' to paint much rosier pictures of the state of the economy and the stock market than is truly the case simply to play the game and avoid losing either their jobs or their well-heeled connections (note all the earnings reports that miraculously beat earnings by a penny) All the while, the investing public is being duped to believe that the game is honest and true reflection of the free market forces of supply and demand Sure, you can make a buck on the way up and, ultimately, that is what this is all about anyway. But, when you study the markets for the many years you understand that it is an industry built on lies, deception and, yes, a lot of money looking to get in front of a lot of other big money. We are told that a new bull market is underway. The bell has sounded. In my opinion only fools will tread into the market at this time. And, we know there are plenty of them out there. Here, the market is still coming off an overbought condition and I strongly suspect the market will be carefully manipulated to present itself in its best light. But, look later for serious downside volume to appear as the bear market resumes."
"We are taking a 15% hedging position in the Potomac US Short Fund (PSPSX)," says Ivan Martchev in Wall Street Winners . "We plan to make a market-timing move in order to hedge our gains in this market. This recommendation should only be viewed in the context of a diversified mutual fund portfolio, but not as a stand-alone recommendation of speculative nature. This fund inversely correlates the performance of the S&P 500. We picked this fund for our hedging strategy because it has the lowest minimum initial investment from its peers ($10,000) and has a reasonable expense ratio of 1.6% for an actively traded fund. Understand that this isn't an attempt to catch a top in the market, but rather hedge gains we have so far since the beginning of the year until a more opportune time. Right now, when no one wants portfolio insurance, we want all the portfolio insurance we can get."
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