I hope everyone is having a wonderful Labor Day weekend of sun and fun. The market isn’t quite enjoying the summer sunshine as our models remain in SELL modes on all indexes outside of the Nasdaq which remains under a NEUTRAL condition.
There are bright spots out there in individual leading stocks and with the futures market indicating a gap opening it is possible that we might be able to go back into a NEUTRAL or even BUY condition if Monday is impressive enough on the Nasdaq and Russell 2000. Still that is just an assumption. At the same time, the gap opening could be a big old fat trap and end up being the highs of the day before a bigger selloff.
Either way, we are positioned very well here. We have a lot of leading stocks working in our portfolios and we have many stocks where we have active GTC STOP orders working. So overall we do expect the uptrend to resume when this round of selling is finished. In saying that however, we do have hedges working just in case our analysis is incorrect and the market decides to produce a big fat old rollover here.
Despite the strong futures market, we are going to go ahead with adding to our hedges following the re-reversal of the 50 day moving average on the Russell 2000. This will at least allow for a better entry and will not cost us nearly as much if we are wrong, compared to a flat futures market opening up on Tuesday.
Overall, we are just going to remain fluid here–especially with the low overall volume–as stocks are really range bound in between the June lows and the August highs. Until we resolve either one of those key resistance or support areas, it is going to be difficult to give preference to one direction or the other. The good news, for bulls, is that there are so many high quality stocks with solid fundamentals forming sound technical consolidation patterns that you would think a resolve higher is the most likely outcome.
We shall see if that will be the case this September. Once again, have a great rest of your long weekend and Aloha from Maui where every weekend feels like Labor Day weekend. Aloha!!
CURRENT TOP HOLDINGS – PERCENT GAIN SINCE SIGNAL – DATE OF SIGNAL
CAMP long – 191% – 4/26/12
POWR long – 137% – 12/11/12
FLT long – 131% – 9/6/12
WAGE long – 130% – 1/8/13
INSM long – 103% – 4/19/13
HEES long – 100% – 9/4/12
MEI long – 77% – 4/10/13
ADUS long – 71% – 4/22/13
GMCR long – 53% – 4/23/13
LGF long – 48% – 4/19/13
CHUY long – 43% – 1/10/13
WDC long – 41% – 1/9/13
V long – 36% – 8/31/12
ADS long – 35% – 12/11/12
DDD long – 35% – 4/30/13
TRLA long – 33% – 6/28/13
WST long – 32% – 1/22/13
CCF long – 32% – 6/28/13
OCN long – 26% – 5/8/13
BEAV long – 26% – 3/5/13
