By Scott at Sabrient and Ilene at Phil’s Stock World
Tuesday’s housing report set the tone for a continuation of the weakness in the market we have seen since August 10, 2010. DHH short tilt has allowed us to capture some nice profits on the way down. S&P 1050 is a possible support area as indicated on the chart below and so we feel it is a good time to get off the RAIL which we suggested shorting on July 29, 2010 at $24.25 and has given us a profit of 11.71% in just under 30 days. We believe there are other opportunities out there that give us a better risk/reward now that RAIL has shed 11% of its value, and we will replace it shortly.
BUY TO COVER RAIL, at the market Tuesday August 24, 2010
Chart by FreeStockCharts.com
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By Scott at Sabrient and Ilene at Phil’s Stock World
Cover short AMAG at the Market, Thursday 7/29/10
Short RAIL at the Market, Thursday 7/29/10
AMAG lived up to expectations last night with a resounding -$1.01 versus expectations of -$.96 and revenues fell slightly short at a not-so-healthy $16 million from its main product, Feraheme. Analyst Robert W. Baird immediately dropped AMAG from outperform to neutral and the stock has fallen -13.51%. DHH added AMAG as a short on July 1, 2010 in anticipation of the “earnings” shortfall. We believe it is best to “sell on the news” so we are recommending covering AMAG at the market.
DHH will replace the short position in the virtual portfolio to maintain our BALANCED Long/Short tilt as the market is between the 50 and 200 day MA at this time. Read more…
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Several comments to this week’s article on SeekingAlpha (“What the Market Wants: A Week of Murk and Fog”) have prompted me to make a few points of clarification.
First, regarding the controversy over my comment about “cash on the sidelines,” Sabrient uses a proprietary formula to track this very thing, with a combination of mutual fund cash, money market cash (cash that is frequently in the market instead of in money market funds), cash available from pension and endowment funds, short interest in the aggregate, and estimates of foreign funds available for domestic markets. We use this information internally, but not in any significant way since we normally are agnostic to short-term (less than one year) market direction. It is my personal opinion that there is a larger than normal amount of such cash on the sidelines at this point in time, and in my article was commenting that such cash was probably responsible for inexplicable bullish reactions to bearish news days. Read more…
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