Friday, August 03, 2007

Market Thoughts

As you noticed I’ve been mostly staying away from markets for a while now, the name of my game at the moment is “preservation of capital” – I am a perpetual bull, shorting is the last resort for me.
Forced myself into looking at the whole 9 yards of market/credit story - here what I think.
I don't think FEDs will cut rates just yet, what they will do they will change phrasing,
Admit seriousness of credit crunch (they brought rates too much down on the first place and that caused all bad credits not backed up by any meaningful collateral). Market will run first,
then, as my friend Chelobes from TradeGuild noted, will trade sideways for a while with 1999 year end kind of rally.
Meanwhile, the most promising sectors
to play on the long side are:
biotech ( not all of it, but mostly research substance makers such as: AKRX, GLGC, MGRM, MZT, SNUS),
defense contractors ( such as LMIA, LMT, KRSL, RTN last one run up on Cramer comments),
office supplies ( OMX ),
and - laugh all you want - homebuilders ( such as LEN, KBH - will keep my fingers crossed)

And here are few of my current positions: MOH, HNSN, OSUR, PAET and HINT (will, most likely close on Monday), ABBI and RMKR ( opened today),