Sunday Night Market Insight, March 16 2008
The market this week has its hands full. Bear Stearns (BSC) reports earnings tomorrow after the bell (read up on the Bear Stearns Bailout), and the Feds are expected to drop interest rates by up to a full point on Tuesday.
The NASDAQ and S&P 500 both closed Friday within 2% of their 52 week lows. A break to fresh lows this week could be catastrophic for the market. Cash is king in these uncertain times for the average investor.
For me I am 100% cash heading into tomorrow’s action, and I am looking only to trade quick price swings intraday. Holding positions overnight is very risky with the added volatility.
The Market
- Overall market is still in a Confirmed Downtrend.
- S&P 500 set to test 1270.05 this week?
EDIT: Bear Stearns was bought out for $2 by JP Morgan it seems. The Japanese markets are down 3% because of it right now. I would expect us to open very sour tomorrow morning.
What You Should Know
Groups I am continuing to monitor closely this week include:
- Metal Ores - RIO, BHP, CLF, TGB, SWC
- Gold/Silver - GLD (Gold’s ETF), GG, AUY, ABX, GOLD, BVN
- Fertilizers - POT, MOS, CF
- Oilgas US Exploration & Production - EOG, RRC, BZP, DVN, SWN, CRZO, SGY, WLL, ME, CXO, CL, etc.
- Steel - MTL, AKS, STLD, GGB, MT
Two other groups that I am starting to track closely are Building Residential & Commercial and Machinery Construction & Mining. These groups includes stocks like CAT, BUCY, JOYG, DHI, MHO, GFA, and others.
3 Tips to Keep in Mind This Week
Not much has changed from last week.
- Tight stops in a down trending market are not just smart, they are critical.
- Sitting in cash is not stupid.
- Discipline is the way of the successful investor.
3 ETFs Worthy of Any Portfolio
DBC, GLD, SLV
See you tomorrow.
Discuss this post in the StockTradingToGo Forum.
Subscribe To StockTradingToGo.com
[...] in pre-market trading with leader POT down 3.3%, CF down 2.4%, and MOS trading down 3.6%. As I said last night I would be watching the above industry groups closely this [...]