Bill Cara’s Blog for Nov 28, 2011
CTA Trading Desk Morning Report
[7:00am ET] Good morning.
Europe’s Banks bounce back to lift investor spirits at the start of the week.
Europe’s Miners & Oilers and Consumer stocks also start the week in the green.
No red on the board presently, but the key to equities this week will be the bond market.
[8:15am ET] Good morning, Geoff here.
It looks like another “the world didn’t end” Monday rally. I mentioned last week that I thought we were close to putting in a top in the US dollar and that event could be occurring today as the US dollar looks like it has formed a double top. That top would signal a low in both stocks and commodities and it would be time to buy.
The strong rally in stocks this morning is a short squeeze, but how long will that last? Good news out of Europe may extend the rally as will the liquidity that is sure to come – we are just not sure of the timing of said liquidity and if it will be pulling the market higher on this particular rally. Regardless, I think this will end up being a tradable low in stocks and we will be putting money to work here.
Late last week we were repositioning the portfolio. We sold TLT (long duration bond etf) as we viewed that rally as ending soon and we sold SHY (short duration bond etf) in order to raise cash to use in future stock purchases. In stocks, we bought Cara 100 stocks that we viewed as the strongest stocks on an earning basis and sold a few out that were not showing relatively high current earnings strength. On Thursday and Friday we bought or added to; BIDU, MSFT, NGD, SBUX, SCHW, ATVI, FSLR and SNDK. We also sold puts in SBUX, SNDK and POT. That basket, in addition to other stocks in the portfolio, may or may not outperform the S&P 500 moving forward, but we are always looking to be long the “best of breed” and it will be interesting to see how they perform.
Perhaps our favorite sector is the gold miners so you can guess that we will be adding to those names, hopefully having the opportunity to buy on dips. In the All Weather portfolio, we are long; CEF, FCX, GG, SLW, SVM, NGD, UXG and we initiated a new position in PHYS last week. Of course, the Junior Gold portfolio has many more holdings, some of which are too small to mention here because that may affect the stock movement moving forward.
Political news will continue to move the markets, but for the time being shorts are being forced to cover and probably will be for a few more days – just hope you were not getting short into the fear last week because this rally may last longer than many anticipate and surprise to the upside.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||81.10 (4.87%)||Components, Chart, More|
||61.85 (3.22%)||Components, Chart, More|
||108.35 (3.79%)||Components, Chart, More|
||170.31 (3.10%)||Components, Chart, More|
||2.76 (1.02%)||Components, Chart, More|
|^OSEAX||OSE All Share||415.05
||8.45 (2.08%)||Components, Chart, More|
||8.43 (3.04%)||Components, Chart, More|
||100.37 (1.86%)||Components, Chart, More|
||100.78 (1.95%)||Components, Chart, More|
||19.00 (2.25%)||Chart, More|
||25.33 (3.25%)||Components, Chart, More|
||38.75 (2.75%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||664.70
||0.46 (0.07%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad’s Catch of the Day
Kaimu’s Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report