To me, it appears that the current rally is failing. Therefore, I closed out the remaining positions last week.
The final overall portfolio was down 16.4%. The portfolio bottomed on October 10, 2008 at -35.0%. The only positives were the gain from shorting Las Vegas Sands and the small gain from Southwestern Energy. 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 and received a sell signal on 3/6/09.
| Stock [purchase date] | Shares | Purchase Price | Price |
| Range Resources(RRC) [7/10/08]* | 50 | $58.17 | sold on 6/19/09 at $44.06 |
| Potash (POT) [7/18/08]* | 10 | $215.09 | sold on 6/17/09 at $97.54 |
| Southwestern Energy (SWN) [7/18/08]* | 50 | $39.46 | sold on 5/8/09 at $40.90 |
| Potash (POT) [7/24/08]* | 10 | $192.02 | sold on 6/17/09 at $97.54 |
| Southwestern Energy (SWN) [3/5/09]* | 50 | $29.44 | 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 was trying to hold all stocks until breakeven, but the breakdown of the current rally convinced me to sell all positions last week.
| Stock [short date] | Shares | Short Price | Price |
| Las Vegas Sands (LVS) [7/7/08] | 100 | $38.10 | 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 is at $8.14 as of 6/19/09. 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 6/6/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8539.73, 1827.47, 921.23. All three indices have risen significantly from lows in March 9, 2009. According to Morningstar the S&P 500 and Nasdaq are up for 2009 at 3.32%, and 15.88%, respectively. The Dow is down 0.98%
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. In May, 2009, we cashed out of all the taxable managed funds and have used 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, the managed accounts are long Range Resources, and Sears Holdings. We do not hold any of the mentioned stocks in our trading accounts.
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This is not financial or investment advice. Please consult a professional advisor.
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