So we have rallied 600 points in the DOW straight in the last 4 trading sessions. I think its time to take a breather. We are bumping into overhead resistance now. As i said earlier, i still firmly believe we are in a strong downtreanding bear market. But you will get intermediate rallies like the one that just happened, to take advantage of. I think at this point all the good news have been priced in the market (Ambac, MBIA ratings held steady).
As for my positions, I got out of all my FWLT on Monday since it was reporting Tuesday morning before open. As i predicted, any company that puts out bad numbers/guidance in a bear market is taken out to the woodshed. Same thing happened to FWLT. The stock is down 25% since it reported earnings.
Also took off my GS long position for a very small loss(4%). I still love the company's long-term prospects but there just doesnt seem to be an institutional money flowing into this stock. The DOW's had a very strong rally and GS has essentially just traded in a range around its pivot point. Imagine what will happen to GS if the DOW drops 300 points in a day. It will be slaughtered! If big money isnt buying, there is no reason for you to jump the gun and get long here.
Only long i own here is Sony(SNE). Have a 18% gain in the stock so far but am willing to jump ship quickly to protect my profits if the market turns hard. I think with HD-DVD out of the picture, the lagging 2007 Playstation 3 sales will see a huge boost in 2008. People will be buying the PS3 eagerly bcause you get the Blu-Ray player (now that the format wars are over) and video game system bundled into a nice $400 package. I just bought myself one earlier this week for the same reasons and i believe many others will follow suit!
I'm am also mostly closing out my positions since i'll be travelling out of the country for the next 2 weeks. It's hard enough sleeping everynight with big positions on, let alone travel without access to instant quotes :)
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