|
From: R. A. Christy
Editor/Publisher, ‘The Long and Short of
It’
President/CEO, Christy Investment Group
http://www.christyinvestments.com
Date: March 10, 2008
DEFENSE – OFFENSE – DEFENSE
Our indicators have flipped back
to DEFENSE after the short flirtation on OFFENSE. This is getting old
and I don’t think that we are out of the woods yet. History will show
that this is one of the fastest 20% drops in history, all this brought
to us by our friends at the Federal Reserve.
Welcome to the Bermuda Triangle
of Investing.
I was watching a show on TV’s
The Learning Channel over the weekend that dealt with the mysteries of
the Bermuda Triangle. What goes on out at sea, also goes on in the
canyons of Wall Street.
I am always struck by the story
of Flight 19. For those not familiar, the mystery of Flight 19 remains
unsolved today. The story begins rather sublimely on December 5, 1945
when a squadron of Navy Avenger Bombers left NAS Ft. Lauderdale and
headed out for a routine training mission. Flight 19 was never heard
from again. The loss of 14 Navy personnel and planes is nothing short of
sensational. Sixty three years have passed and there is still no
explanation as to why the planes were lost. No trace of the wreckage has
ever been recovered. Flight 19 simply disappeared.
Why they disappeared is
something that we’ll probably never know. A number of theories have been
presented and the one most often accepted is that the planes became
disoriented and lost. Either their indicators failed or they failed to
follow their indicators.
This sounds awfully familiar
today. Many investors are lost and may never be heard from again. The
reason is that they don’t have an investment compass to guide them. Yes,
the market is a mess and it’s hard to divine which way is north. Our
primary indicator (Bullish Percent) is the one that determines whether
we are on Offense or Defense.
The indicators as of last night
are as follows:
BP NYSE:
Os @ 28%
BP OTC: Xs @ 28%
BP Optionable Stocks:
Os @ 26%
BP S&P 500:
Os @ 26%
BP World Index:
Os @ 30%
Not pretty to say the least. So
for the time being, we’re back on DEFENSE which means that we attempting
to preserve capital until the market reverses once again to OFFENSE.
Several things that make sense
here are to review every position in your portfolio and keep the stuff
that you really want to own and sell the stuff you don’t want. Do it
NOW. Another thing is to do is take some partial profits. If you need to
jump into something, do so carefully and I would use call options in
lieu of an outright stock purchase. I would also lag into positions. To
protect against further downside, you might look to buying protective
put options on your holdings or use index puts to cover the whole
portfolio.
One thing that has me confounded
is that our indicators are saying one thing and the market is doing the
exact opposite. The price of oil is sky-rocketing and yet the prices of
many oil/oil service stocks are not moving higher. Even the prices of
the OIL sector ETFs aren’t reacting as they should.
The same is true for GOLD and
Agricultural Commodities. There are anomalies like this in almost every
sector that I look at.
Unlike Flight 19, we’re going to
follow our indicators and trust what they have to say. This time isn’t
different and history most likely will repeat itself.
If you have any questions,
comments or concerns, do not hesitate to send me an email or call me.
Until next time,
Robert Christy
The Intelligent
Trader
P.S. Please fee
free to forward this to your peers, friends and associates you think
would benefit from its contents. They will thank you for it - and so
will I!
**********
The Intelligent Trader's ‘Long and Short
of It’ is an OPT-IN
e-letter only. Sign Up to receive your own free copy:
http://www.christyinvestments.com. Please be assured we do not spam or give
personal information to third parties--ever.
**********
About 20% of e-mail is never received due
to spam filters.
If you have a spam checking program
installed on your computer, please be sure to add
rac@christyinvestments.com to your "safe list."
**********
Robert Christy is a professional stock
trader, money manager and author. Mr. Christy is the President CEO of
Christy Investment Group, Ltd., a registered investment advisory firm.
He is also the Managing Partner and Portfolio Manager of Plato Advisors,
LLC. At the time of publication, Mr. Christy may from time to time write
about stocks in which he, Christy Investment Group Ltd or Plato Advisors
LLC has a position. In such cases, appropriate disclosure is made.
Under no circumstances does the information in this column represent a
specific recommendation to buy or sell stocks. Mr. Christy appreciates
your feedback and invites you to send it to
rac@christyinvestments.com.
The Intelligent Trader
c/o Christy Investment Group
P.O. Box 625
Alpharetta, GA 30009-0625
To unsubscribe or change subscriber
options, please contact us:
online:
http://www.christyinvestments.com
by email:
info@christyinvestments.com
© Copyright 2008 RA Christy |
