Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Storming the Opening Bell

By

Put away the shotgun and get out your sniper rifle. Instead of shooting at everything that moves pick your targets carefully.

PrintPRINT
Sometimes no matter how prepared or well balanced your portfolio, you are going to have a rough day in the market. With Friday's action and the continued selling in world markets, Monday seems to be setting up for an ugly open. It goes with the territory. How we respond to these events may be more important than the event itself.

Disappointing earnings from some of the key Dow components as well as the beloved Schlumberger (SLB) have set up an interesting picture. Today's open may have more in common with the scene of assault craft storming the beaches of Normandy in Tom Hanks' "Saving Private Ryan" than the traditional ringing of the bell. As the bell rings and the gate lowers on your landing craft, comrades fall one by one. The beaches turn red just like the screen on your desk.

There is no way to avoid it. Earnings this quarter are not what Bull Markets are made of. For stocks to regain their footing there will have to be visible improvement in earnings or lower valuations to attract deep value investors. We can talk about how the fed is on our side, interest rates are low, global expansion, yada yada yada. In the end fundamentals will rule and right now fundamentals in the US are weakening. You can't have this many key companies disappoint without questioning the economy's health.

Investing 101 tells us that when we have opportunities like today we must by the dip. If you are going to Rambo up and step into the fire fight let's talk about a few ground rules. First put away the shotgun and get out your sniper rifle. Instead of shooting at everything that moves pick your targets carefully.

Who had great earnings in the last few weeks and lived up to or even exceeded expectations? The list is short but they are out there. Intel (INTC), Google (GOOG), and Textron (TXT) come to mind. If stocks with positive earnings surprise or some other powerful catalyst get hit, one may look to place bets here. These will be the first to recover and regain their leadership. Stop focusing on the 52 week low list. The prospects for Washington Mutual (WM) or Citigroup (C) didn't get any better just because they are a few points lower.

Don't be impatient. Every sell off is different, but you may want to wait at least until 10:30 before you place your trades. Look to buy over the course of the day. Leave some ammunition for later in the afternoon. We may need it.
Positions in INTC, TXT
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE