$SPY, $STUDY With the Greeks set to meet with their creditors over
the weekend, investors stayed cautious Friday. A nearly 8% drop in the Shanghai stock market scared
some investors, while a strong earnings report from NKE and a better than
expected June Michigan Sentiment reading kept investors optimistic about our
economic growth. Like Thursday, higher prices in the first hour were met by
profit taking. Technology stocks weighed on the overall market after MU missed
its earnings on poor PC sales.
Trading volume was unduly heavy Friday as the result of the
Russell index rebalancing. There are a few factors which will likely keep the
uncertainty relatively high in the market next week. The obvious one continues
to be the Greek factor. Greece is due to make a payment to the IMF on Tuesday.
Unless a deal is reached over the weekend, expect the anxiety to continue into
Tuesday. Then, there is the usual quarter end window dressing which should
bring a positive bias. Lastly, it is going to be a holiday-shortened week.
Neither bulls nor bears are likely to make large trading commitments ahead of
the holiday.
Technically, there are some increasing warning signs as the Major
Market Model has reduced the Asset Allocation recommendation to 37.5% Long
62.5% Cash. I added AVGO, EW and GILD to the portfolio on June 22nd
and sold STZ on June 25th due to an Opinion Downgrade. Timing is everything and my timing over the
past week left something to be desired.
Not only did I elect to add to the portfolio in front of the current
weakening in Technology segment I barely broke even for the week with my
options trading. While there were two
winning and two losing trades resulting in a nominal profit for the week I chose
to trade on Friday not taking into account the probable impact of the Russell
rebalancing activities. Friday’s trade
resulted in a -6.89% loss on the trade and while not the largest single loss
for the year it is close. And I have no
one but myself to blame, as I neglected to take my own advice and take the time
to check the calendar before trading.
This negligence resulted in my being locked into a positon after my Stop
Loss alert was triggered and having to watch the Bid drop an additional dime
before I could get executed. My fault
and a lesson learned.
However the overall uptrend remains intact as the S&P 500
remains in a slight upward sloping/sideways channel, stock-picking is the way
to go.
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