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From: Robert A. Christy
Editor/Publisher, ‘The Intelligent
Trader’
http://www.christyinvestments.com
http://www.intelligent-trader.com
Date: July 3, 2008
This weeks’ ‘Long and Short of It’.
First the Bullish Percent numbers:
BPNYSE
Os @ 36% Defense
BPOTC Os @
34% Defense
BPSP500 Os @
34% Defense
We begin the month of July pretty much
in the same muck that we’ve been wading through all year. Oil is driving
the market and it just won’t break down in price. The market is a mess
technically and trying to game a dead cat bounce is foolhardy.
Also, last week extended the longest
streak of weekly declines in 4 years. The S&P 500 Bank Index weighed in
at a 12 year low and General Motors fell to $10. How I wished I had
stayed short GM. I was dead on and took profits just a tad early.
Patience was never one of my virtues.
On the comical side, analysts spent last
week lowering their ratings from BUY to HOLD or NEUTRAL on a number of
names last week. I guess after six months of misery, this is there was
of pulling the plug.
The futures market is pricing in an 85%
probability that the Fed will do nothing at their August meeting. I’m OK
with this because we don’t need the Fed meddling in the election.
On the Euro front, the European Central
Bank (ECB) President Jean-Claude Trichet raised rates 25 basis points to
4.25% with hopes of bringing inflation on the continent back under the
2% level. The wording of his statement indicate that he has no further
plans to raise rates again this year. That could change if future
inflation expectations change. I just love these political bankers. The
bottom line is that the ECB will do whatever it takes to hold the line
on inflation.
Bear market territory is upon us which
means that the S&P 500 is about to go below 1252.12 which is a 20% drop
from last October’s high. I’m beginning to wonder if the talking heads
can complete a sentence without using the term bear market. All this is
doing is making mom and pop public panic. Given the spate of calls that
I have fielded from small accounts over the past week, I’m thinking the
bottom is pretty close.
Add to this that everyone who called for
a recession is now patting themselves on the back for finally getting
one right – and they are still wrong. The pundits want to change the
definition of what is a recession is because they are saying this one is
different. It doesn’t work that way. We won’t know if we are in a
recession until it’s over.
If you’re long stocks at this point,
keep an eye on your stops to prevent against surprises. Earnings season
starts this week and Alcoa reports on Tuesday. GE comes in on Thursday
or Friday.
As for performance, we finished the first half in the
black. Our Strategic Long/Short Portfolio posted a gain of 1.58% versus
-12.83% for the S&P 500.
Here are some of the names that I am
looking at:
Long side: CPE
Short side: ACI, MEE, SCHN, BTU, ANK,
SID, STLD
That’s about it for now.
Robert Christy
The Intelligent Trader
P.S. Despite the sub-prime sell-off, the
credit crunch, and high oil prices, The Intelligent Trader continued to
deliver outstanding profits for subscribers in 2008. In 2007, we
finished the year up better than 17% --that's more than 3 times better
than the S&P 500 up only 5%. It’s been tough going so far this year, but
at the halfway point, we’re positive and the market isn’t. I’m looking
forward to the second half of 2008 with even higher expectations-despite
the risks most investors will face in the months ahead. If you’re not
yet a subscriber to The Intelligent Trader, I think you should give us a
try because I’m sure that will help your bottom line.
P.S.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!
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Robert Christy is a professional stock
trader, money manager, author and speaker. 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 Crabapple
Capital Group, LLC and the editor/publisher of The Intelligent Trader, a
subscription based long/short trading service. At the time of
publication, Mr. Christy may from time to time write about stocks in
which he, Christy Investment Group Ltd, Crabapple Capital Group, LLC or
The Intelligent Trader 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.
Robert Christy
The Intelligent Trader
c/o Christy Investment Group
P.O. Box
625
Alpharetta,
GA 30009-0625
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