China's reserve hike caused a sell off in a specific sector and knocked us out of a very nice position.
China raised its reserve requirements for the fourth time this year in an effort to slow inflation. This came only a few days after an interest rate hike so traders got the message China is serious about reducing consumer demand and inflation. Reportedly that caused a dip in the fertilizer sector and knocked us out of Mosaic. The stock declined -3.73 on Friday to close right on our stop at $82.95.
Personally I believe it was just profit taking in the sector after CF Industried (CF) posted earnings on Thursday night that appeared OK on the surface but they may have been just slightly underwhelming. The entire sector declined with CF losing $10.
We were stopped out of the Mosaic play at 62-cents for a gain of 99-cents. No complaints but we were very close to our 25-cent target on Thursday. We can never complain about getting stopped out for a profit.
I am not going to add any plays today because the futures are down hard tonight on the increasing violence in the Middle East. I will look again on Monday night and send another newsletter then once we see what happens on Monday.
The U.S. market is closed on Monday so we are not losing anything by waiting 24 hours to make a decision.
Current Position Changes
New Long Term Recommendations
None - Waiting for a "real" market dip, not a one day wonder
New Aggressive Recommendations