A Tug of War

Wall Street Sector Selector Review

Sector Selector Update June 1, 2008   Current Positions:   Entry Date:     Positions:          Profit/Loss%       4/21/2008:           Pos#1:                       +12.7% 5/5/2008:             Pos#2:                       +8.2% 5/26/2008:           Pos#3:                       -2.6% 5/26/2008:           Pos#4:                       -2.7% 5/26/2008:           Pos#5:                       -2.6%             Year To Date:     Wall Street Sector Selector:     +4.0% S&P 500:                                        -4.6%   All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions or dividends    On Monday, 5/26/2008 the system took profits in the following positions:   IYT:     +7.9% in aprox. 2 months FXI:    +1.4% in approx. 3 weeks IWM:  +6.1% in appro. 2 months Learn More

Greed and Fear Index       Yellow flag is flying.   Bears fighting for control.   We can expect sideways, choppy action.   Possible strategies include raising cash, bearish options strategies, tighter stop loss points.         Wall Street Sector Selector strategy is to buy sector ETFs that have potential to outperform S&P 500 regardless of market conditions.     Duration of caution is unknown; flag will switch to green or red when greed or fear regains control.

Tug of War   Dear john    May closed out on a generally up note as the dollar strengthened and oil prices receded, but overall results for the indexes were mixed as the Dow gained +1.2% for the week, the NASDAQ gained +3.2% and the S&P 500 lost -1.8%.   The picture is decidedly cloudy as we head into June.  Our portfolio declined about 2% this week as our more defensive posture was hurt by the overall decline in commodities.   A very intense tug of war between bulls and bears over the state of economic growth and rising inflation is playing out and the coming week will have some extremely important news that will influence the short to mid term market action.    Watch for the employment on Friday for an indication of where we’re going from here.             Mixed signals this week as the Fed began talking about raising interest rates in the autumn to combat growing inflation which led to a stronger dollar and weaker oil and commodity prices.   The markets eaked out a gain in spite of the University of Michigan Consumer Confidence Index coming in at its lowest reading in 28 years.   Oil finished up lower on the week but up 12% for the month and more than double one year ago. Prices declined in spite of adrop in inventory of 8.7 million barrels.    Natural gas futures contracts remain strong as we enter the hurricane season on June 1 which could affect both gas and oil prices if a hurricane disrupts Gulf of Mexico oil supply operations.   The National Hurricane Center forecasts a 60-70% chance of 12-16 named storms, 6-9 hurricanes and 2-5 major storms.   On the food front, the UN forescasts that food prices will substantially surpass the average levels of the last ten years and a 9% annual increase in food prices/year is forecast for the United States.          Another busy week of market moving reports::   Monday: Institute of Supply Manfucturing May Report, April Construction Spending   Tuesday:  April Factory Orders, May Vehicle Sales   Wednesday: May ADP Employment Index    Thursday: Weekly Jobless Claims    Friday: May Non Farm Payrolls Report, April Wholesale Inventory Report       Sector Spotlight   Weekly Leaders:  Transportation, Technology   Weekly Laggards: Precious metals, Oil, Commodities   I’m in the middle of a busy travel schedule with Denver last week, Kona, Hawaii, and Chicago next week, followed by Omaha next weekend for an Olympic Trials tune up meet with my son.   But over all the miles, you can be sure I’ll be keeping close track of our positions and the drama playing out in the stock markets of the world.   Wishing you a great weekend.   Your partner in prosperity, John John Nyaradi Publisher Wall Street Sector Selector