Monday, May 25, 2009

5/25/09 Stock Position Update - Commodity stocks continue to advance

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. I updated the stock picks for the modified Unemotional Investor Growth system with a 5/4/09 buy list that only had one stock, Cognizant Technology (CTSH). I plan to buy Cognizant Technology only if the stock market corrects and the stock falls to $20.

To me, it appears that the current rally is weakening. If any position gets close to breaking even, I will consider selling the stock.

The portfolio rose 15.1 % this week versus 0.2 to 0.7% advances for the market indices. Potash gained about 7% as commodity stocks continued to show strength. The overall portfolio is down 14.7% and the remaining holdings are down 37.1%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]SharesPurchase Price

Price on 5/22/09

Range Resources(RRC) [7/10/08]*50



Potash (POT) [7/18/08]*10



Southwestern Energy (SWN) [7/18/08]*50


sold on 5/8/09 at $40.90

Potash (POT) [7/24/08]*10



Southwestern Energy (SWN) [3/5/09]*50


sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

From My Wealth Builder 7/7/08 Short List
Stock [short date]SharesShort Price


Las Vegas Sands (LVS) [7/7/08]100


closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $10.50 on 5/8/09, and has pulled back to $8.96 as of 5/22/09. The massive rebound and now pullback of Las Vegas Sands and other poor quality stocks continues to support that the current advance is likely a bear market rally.

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 5/22/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8277.32, 1692.01, 887.00. All three indices have risen significantly from lows in March 9, 2009. The Dow has declined -4.19 % year to date. The S&P 500 continues to also be in negative territory with a -0.68% decline for the year. Again, only the Nasdaq is up at 7.29% in 2009.

Economists acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy with a correction in the near future. Last week, we cashed out of all the taxable managed funds and will use the proceeds to pay off our mortgage. If the market should correct, we will trickle some funds back into individual stocks.

Disclosure: At time of publication, I am long Range Resources, and Potash in my trading account. The managed accounts are long Range Resources, and Sears Holdings.

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This is not financial or investment advice. Please consult a professional advisor.

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