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From: Robert A. Christy
Editor/Publisher, ‘The Intelligent
Trader’
http://www.christyinvestments.com
http://www.intelligent-trader.com
Date: August 11, 2008
This weeks’ ‘Long and Short of It’.
First the Bullish Percent numbers:
BPNYSE Xs
@ 38% OFFENSE
BPOTC Xs @ 32%
OFFENSE
BPSP500 Xs @
44% OFFENSE
SECTORS
Favored Sectors: Waste Management,
Textiles, Business, Biomedical, Real Estate, Real Estate, Banks, Non-Air
Transports, Computers, Software, Drugs, Protection & Safety Equipment,
and Savings and Loans
OIL
Last week was a pretty good week and we
ended on a pretty good note. The market rally was fueled by the fall in
oil prices was led by the retail and transportation stocks. Oil closed
out the week at $115.20 a barrel and natural gas touched a 6 month low.
I am having a hard time making sense out
of a lot of this, but there are a couple of reasons why I think oil is
falling in price. First, the run up had a lot to do with new specs in
the market, a lot of short covering by hedgers, and a supply/demand
hiccup. Second, the Olympics are on and that means that China is on a
month long national holiday. Shutting down that much industrial capacity
has to something to the overall price. Third, Americans are getting the
message and getting rid of the gas guzzlers, car-pooling, and driving
less.
COMMODITIES
Also, last week, we saw a pretty sizable
scramble out of commodity related names. Gold and silver took it on the
chin with a lot of others such as grains, copper, coffee, coffee, sugar
and cocoa. I don’t think this is the start of a new trend, but just some
old fashioned profit taking.
DOLLAR
The greenback had its best rally in
years. The reason is that the EU chief (European Union) said Thursday
that euro zone economic growth would be slow. That sent things flying in
all directions. [Forex note: I am short the CAD/JPY (Canadian
dollar/Japanese Yen) pair] This news sent the big players into a profit
taking mode. The Euro has been on a run for something like 8 years and
sooner or later the run would end.
I am looking for the dollar rally to
continue and show some strength against the Euro and the Yen. I think
the dollar will still be weak against the BRIC countries. (Brazil,
Russia, India, and China)
WHAT’S NEXT?
The indicators are shaping up and things
are starting to show some signs of life. A lot of new sectors turned
positive this past week which is a good sign. The breadth of the rally
is taking hold, but the depth of it so far leaves a lot to be desired. I
think the market is going to have the jitters for the next month or so.
Even though we’re on offense, I am treading lightly.
The situation in Georgia has me a little
unnerved because the timing of this really looks like it was planned.
The Bush – Putin confrontation at the Olympics pretty much told the
world where both sides stand. While all the world’s eyes are on China,
Russia has a little uprising that is not being fully covered by the
media. Also, Russia has been quietly moving military materiel back into
Cuba. This is in part due to the potential problems that might arise
when Castro dies and to reinforce the alliance that is being forged with
Chavez in Venezuela.
Also, this part of the world is becoming
the next Saudi Arabia. Petrobras reported another large oil find
offshore and this will put the region into play especially if they
demand entry into OPEC.
Take this for what it’s worth. If you
need oil in order for your economy to survive, there are only 3 ways to
get it: (1) you drill for it at home; (2) you buy it on the open market;
and (3) you take it through military force.
I am adding several names to the watch
list that I want to own on the next BUY signal: They are Celgene (CELG,
which we’ve traded before), Celanese, Integral Systems (ISYS), and Natus
Medical (BABY)
Intelligent Trader subscribers should be
on the lookout for new buy recommendations if things keep improving.
I’ll leave you with these thoughts that
have been on my mind of late:
Why is it that other countries can drill
for oil in their country and we can’t drill for oil here in the US?
And, why is it perfectly OK for us to
buy and import another country’s natural resources and leave the same
natural resource that we have here that we could use for our own
economic benefit in the ground?
In 1867, why did William Seward, then US
Secretary of State, spend $7.2 million to purchase Alaska from Russia?
That’s about it for now. Let me here
from you if you have any questions.
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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