Thursday, January 10, 2008

Bennie and the Jets



While I didn't enjoy the encore flaying of my portfolio flanks early in the session, I had to take heart today with the chattering debate of whether or not the Fed "Gets It!" and whether or not Big Ben will stick to the committee-decision process he has favored thus far, or whether he will GET IN LINE PRIVATE BEN!!

The Fed is a political animal and this is an election year - combine that with the raging financial forest fires out there and you can deduce their hand is forced.

Ben's script is out and March fed fund futures are now pricing in a full 1.5% drop in fed funds rate by the March meeting (at the moment).

We are still dealing with negative momentum, as far as current action in the market and I am swimming against the tide (stupid and exhausting). But I've seen this scenario too many times - growth stocks will move strongly, even as Aunt Mingle tightens her COH purse strings; the Fed will see to it, whether they want to or not.

Following this development, the market has initially thrust upward on the realization that the Fed is about to cut rates (as in any day now or potentially prior to the Jan. 30th FOMC meeting). No matter how we get there, rates are going to drop dramatically and no matter how the market wants to bottom (whether we flush again or not - the market will make a tradable bottom here and growth stocks should fly (my opinion)).

I sold RIMM for a small profit. I just don't want big NDX yet, except for quick trades. I couldn't take the SYT profit I was hoping for, as that one gapped-lower (holding for now) and while I wanted to buy the likes of ICLR, AGP, CMED, WAT, RBN, HWAY, SUNH and more, early in the session, the negative overall action held me back (in the case of RBN, this one gapped-down on an analyst downgrade, but it is breaking out now in spite of this).

Big Ben has postured that dramatic cuts are coming. This means that as soon as CFC or any other failing financial Weeble from the depression camp begins to go under for the count - the Fed will fire an interim meeting shell (how fun). Phone calls this week will continue to be interesting, I am sure. You have to wonder if CFC heads are as assuring of having no serious problems on the phone with the Fed as they are with the with public.

...NOT

After the release of the script, I bot CPHD (ave. 28.38) APOL (ave. 80.18) and a tiny amount of CZZ (ave. 13.66...Brazilian sugar/ethanol play - call me mad, but it is a newer issue breaking above previous highs; I have a tight leash here, but it's a potential screamer as long as it is going up; I'm the screamer if not).

We're fledging a little at the moment, but that is better than diving bells and jacking knives. I prefer a slow start to this rally anyway, as that type action has better potential to sustain itself (while a rush-up is always a suspect action when occurring within a bigger down trend). Keep it out of the cellar today and I think we're making a formidable trading low here.

Ben is our Friend. Company man all the way.

Shocker

Current Portfolio (by size): GENZ, APOL,
OII, HOLX, CVI, VIVO, JASO, SYT, YGE, CPHD, CAF, TNH, IRIS, CSIQ, CZZ

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