- New Trades -
(December 08, 2013)
We just witnessed the S&P 500 produce a five-day decline. That has happened in over 15 years. Yet in spite of this "weakness" the index only lost about -1.2%. That doesn't scream fear. It was barely any profit taking at all. That's because fund managers have been trailing the performance of the major indices and they need to chase stocks higher by year end. Thus every dip should be bought. The wild card here could be the U.S. budget deadline on Friday, December 13th and the FOMC meeting on December 17th and 18th.
If there is no budget deal it could negatively impact the market but investors know that Friday is a "soft" deadline and Washington will likely push the issue right down to the wire on January 15th. That means the FOMC meeting is the real landmine we need to avoid. If the Fed does announce any taper to their QE program then stocks could see a knee-jerk reaction lower. That's especially true since most market participants do not expect any taper until March so an announcement in December would be a big surprise. The stock market does not like surprises.
Tonight I am not adding any new trades. We just had a very successful week for our watch list. Four of our watch list candidates met our entry point requirements and graduated to our active play section (those were: CZR, HP, SBUX, and YUM ). Tonight I've added three new candidates to our watch list (DE, MSI, and WFC) and all three of them could be triggered this week.
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself:
GRMN, CTSH, NKE, DNKN, GM, DPZ, WYNN, JBHT, CAT, XOM, CLX, GLW, ABBV, NWL, V, COF, GE, VOD, MDLZ, NUE, PSX, LVS, AXP, FL, JNPR,