Biotech, Banks, Transports – long. Gun Manufacturers – Short

The dust should settle somewhat today.

Yesterday, in case you missed it, was a signal from the market to generally buy stock.

Sectors that I will be watching in order to to build bigger positions are listed below.

Take your time if you are not already in these stocks, as  you are a bit late, and should consider waiting for a calm pullback day.

LONG

Biotech:  IBB, LABU (3x bullish biotech ETF)

Banks:  JPM, etc.  FAS (3x  bullish banks)

Transports: IYT, FDX, etc.

If you are looking to see which sectors are selling off, check out the gun manufacturers. SWHC may be a good stock to short with a tight stop if it bounces higher today.  This is a risky move, so consider paper trading this short just to see if you have what it takes to short stocks.

Park you ego outside your investing office and put some money to work.  If you exercise risk management with exit points and smart position sizes, this is a great time to be an investor.

If you are willing to admit your mistakes, and understand that many, many, many market calls and stock picks will be wrong, you can make money in this market.

Keep your mistakes small by not throwing good money after bad picks or entries, and invest heavily in your correct picks, taking the pain to hold while the wall of worry is scaled.

Best of luck!

 

 

IYT, FDX, AAL

Check out the Dow Transports, ticker IYT,  American Airlines, Ticker AAL, and Fedex, ticker FDX.

Good looking charts.  Any or all of those holdings would be reasonable additions to your portfolio.  You may want to wait until Wednesday to buy them since the election results may cause some serious uncertain moves in the market.

Place a stop loss below a recent low on each chart and you can relax.

Stock picks are always subject to risk, but you can define and limit that downside risk.

 

Good Luck!

 

 

 

Stock Watch List

If the general market can find support this coming week after the election, I will put cash to work that was raised in the selloff.

The below is a list of my most likely “buys” in no particular order.  I select them based on analysis of their chart technical health, and/or fundamental story.

As long as you use a stop, and/or a small initial position size, there is no reason to fear getting back into the market after an ugly selloff.

VMW

TMUS

TTWO

ESNT

MXL

EVR

IPHI

COMM

LGIH

RGLD

AXP

ANET

 

 

What Am I Doing?

My longs are getting sold, as stops are getting hit.

Beware, catching this falling knife, is not a good plan.

I recommend doing nothing in the market until after the election, and then see what the market does.

How do I think this will resolve?

I suspect there will be a day when the institutional investors deploy cash and move the market back higher into a sustainable uptrend.

Institutional money managers who control billions of dollars do not look good being paid fees for being in cash.

Individual investors have the luxury to sit in cash when opportunities do not seem to have a good risk to reward ratio.