The Nasdaq has its 10th up day in a row, the longest such streak in 12 years. SPY rolls up its sixth winner, and reaches another new high for 2009 (marketwatch article).
Earnings have been the story, or non-story. There have been some noteworthy winners such as INTC, IBM, CAT. The misses have been mostly mild. I am of the school of earnings, that long term, earnings are the primary driver for stock prices. This quarter, for the most part, earnings have been good. There have been isolated misses such as LMT (down 7 today on earnings), and a mild decline for GOOG.
My new position in M & T Bank gets off to a poor start. I attribute the decline to lackluster results at STT. In the worst case, an exercise if MTB falls below 45, it isn't a bad stock to own.
Yes, readers may notice that this is different talk than last year when I cut my losses ruthlessly. The new talk is about doubling down (INTC), and taking delivery in stock if the strike gets hit (MTB). Why is that? First, the market is acting a lot better than it was a year ago. SPY remains well above the 200 dma, so that means the long term trend for now is up. Support levels seem to actually provide support. Last year, support levels, were often the best place to initiate short positions as others stepped in to buy.
A second reason is that overall, I remain underinvested in stocks, despite the four tiny long positions (below). Adding on weakness would be a way to get more money working.
With all that, August and September can be treacherous months for the stock market. This year, I think it will be September/October that brings back some of the rollercoaster down drafts. I think August might see a lot more of these slow moving summer vacation trading days.
As readers know, I am not big on predictions. While they can be fun, I see predictions mostly as entertainment. The money is made by making and executing trading plans, right sizing of positions, managing risk. I post my actual trades a few minutes after I get the fills. That info is more substantial than any predictions that I may make.
Long INTC, IWM, XLE, MTB
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