Wall Street Sector Selector Review

John

John Nyaradi

Publisher

A Possible Sea Change

wallstreetsectorselector — Mon, 21 Jul 2008 07:21:32 +0000

Wall Street Sector Selector Review

Sector Selector Update

July 20, 2008

Sector Selector Standard Current Positions:

Entry Date: Positions: Entry Price P/L%

5/26/08:            Pos#1:             $41.61                 +1.06%

6/9/08:              Pos#2F:           $97.75                  +0.14%

6/16/08:            Pos#3:          $41.50 -7.6% stopped out

6/30/08:            Pos#4;            $91.89                 +2.48%

6/30/08:            Pos#5:             $58.63                 +1.04%

Year To Date:

Wall Street Sector Selector: +11.03%

S&P 500: -14.1%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions, dividends or compounding.

Stopped out of DBA @ $38.36 on 7/16/2008 for -7.6% loss

Sector Selector Ultra Current Positions:

7/13/08: Cash

7/13/08: Cash

7/ 13/08: Cash

7/13/08: Cash

7/13/08: Cash

Greed and Fear Index

Yellow flag flying. We expect volatility with bias towards upside.

Possible Sea Change

As we mentioned last week, the markets were vastly oversold and due for a bounce which came this week with the Dow up +3.6%, tne S&P 500 up +1.7% and the NASDAQ up +2.0%.

The rally was led by the decline in oil prices and better than expected numbers from the financial sector.

Our portfolio was down as we were stopped out of DBA and had pullbacks in our commodities positions.

How long this rally will last is unknown but we will reposition accordingly.

When we closed our oil position last month for a profit of 15+%, I had a lot of questions about “why” but I’m happy now that we did with oil down about 6% from where we exited.

Also, we closed SKF, the double inverse financial at 150.92 for a 33% gain on 6/30 and today that ETF stands at 138.0 and so I’m happy to be out of that market, as well.

Volatility remains the name of the game, and we won’t always be right but we will work at being right enough.

Oil fell for four straight sessions this week and suffered its biggest weekly loss ever as US gasoline consumption was down 2.1% year over year.

Second Quarter earnings shift into high gear this week with widely anticipated reports from Bank of America, American Express and Wachovia.

This will be a heavy week for earnings and those reports along with oil prices will drive the market. The technical bounce we expected is happening and appears to be gathering steam.

The Week Ahead

More economic reports coming up this week that could be market movers:

Monday: June Leading Economic Indicators

Tuesday: May Housing Prices

Wednesday: Fed Beige Book

Thursday: Existing Home Sales

Friday: Durable Goods Orders, New Home Sales, Consumer Sentiment

Sector Spotlight

Weekly Leaders: Home Construction, Financials, Regional Banks

Weekly Laggards: Oil, Commodities, Agriculture

This weekend my young son went up to a beautiful lake just an hour from Bend, Lake Paulina, which turns out to be in the Newberry National Volcano Monument. We had some great father and son time camping in our RV and fishing, floating in the raft and going for a 12 mile bike ride which told me I need to get in better shape.

It’s funny how you never play in your own backyard. We’ve lived here 11 years and I’m embarrassed to say it was our first trip to Paulina, but it definitely won’t be our last.

Wishing you a great weekend wherever you may be.

John

John Nyaradi

Publisher

Things Are Getting Scary

wallstreetsectorselector — Mon, 14 Jul 2008 06:50:43 +0000

Wall Street Sector Selector Review

Sector Selector Update

July 13, 2008

Sector Selector Standard Current Positions:

Entry Date: Positions: Entry Price P/L%

5/26/08: Pos#1: $41.61 +10.4%

6/9/08: Pos#2: $97.75 +0.75%

6/16/08: Pos#3: $41.50 -2.7%

6/30/08: Pos#4: $91.89 +3.6%

6/30/08: Pos#5: $58.63 +1.9%

Year To Date:

Wall Street Sector Selector: +14.4%

S&P 500: -15.6%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions, dividends or compounding.

Sector Selector Ultra Current Positions:

7/13/08: Cash

7/ 13/08: Cash

Greed and Fear Index

Red flag is flying

Bears in control.

We can expect declining prices.

Possible strategies include raising cash, bearish options strategies, tighter stop loss points, inverse Exchange Traded Funds.

Wall Street Sector Selector strategy is to buy sector ETFs that have potential to outperform S&P 500 regardless of market conditions.

Duration of “red zone” is unknown; flag will switch to yellow or green when greed comes back into the marketplace.

Things are getting Scary

The major markets suffered again this week, giving up -1.8% on the S&P and -1.6% on the Dow.

Our portfolio stayed flat for the week and positive for the year.

Today is the launch of the Sector Selector Pro program and our new signals tracking the leveraged ETFs. Everyone who signed up for this should receive a “welcome to Pro” email today, and if you don’t, please be sure to let me know so you get on the right lists.

I say that things are getting scary because on Friday after the market close, the FDIC took over IndyMac Bank in Pasadena and it will reopen tomorrow as IndyMac Federal Bank.

This is the 2nd largest bank failure in US history, after Continental Illinois in 1984 and was caused by a $1.3 Billion run on deposits.

These are Depression Era events and with Fannie May and Freddie Mac on the ropes, as well, I feel like things are getting truly ominous.

From a technical standpoint, the markets are vastly oversold and due for a bounce, but these kinds of headlines make the fundamental picture look dark, indeed.

The View from 35,000 Feet

The Fed responded to the ongoing banking crisis by opening the discount window to basically anybody who needs credit which is starting to look like just about everybody.

The availability of credit is declining at the fastest pace since the Great Depression and analysts say this credit contraction could whack 2% off the GDP.

Household wealth fell at an annualized rate of more than $1.5 Trillion in the first quarter, new home sales are down -40.3% year over year and oil reached a record high on Friday due to tensions between Iran and Israel.

Tomorrow promises to be a wild day as investors digest all of this news. It feels a lot like back in March during the Bear Sterns collapse.

Fed Chief Bernanke will be on Capitol Hill Tuesday for what I’m sure will be a “frank exchange,” and 2nd Quarter earnings from Merrill Lynch, Citigroup and JP Morgan will be making headlines.

The Week Ahead

More economic reports coming up this week that could be market movers:

Tuesday: June Producer Price Index, June Core PPI, June retail sales, July Empire State Index, May inventories

Wednesday: June Consumer Price Index, June Industrial Production, July home builders index

Thursday: June housing starts

Sector Spotlight

Weekly Leaders: Precious Metals, Oil

Weekly Laggards: Financials, Insurance, Home Builders

This week, my wife and young son accompanied me on a trip to Seoul, South Korea, where we enjoyed a couple of days of “guerilla tourism,” visiting the DMZ and shopping and eating our way around Seoul.

We went up to Panmunjom where the two sides still face each other in a Cold War standoff and saw the stark contrasts between a free and repressive system. Seoul is a vibrant Western city while the night time satellite photo of the North shows a nearly dark landscape and reports of widespread hardship among its citizens abound.

It was a great experience for my young son and for us, as well, and it’s definitely worth the trip if you’re in Asia.

Wishing you a great weekend wherever you may be.

Your partner in prosperity,

John

John Nyaradi

Publisher

Another Good Week

wallstreetsectorselector — Sun, 06 Jul 2008 16:03:18 +0000

Sector Selector Update

July 6, 2008

Current Positions:

Entry Date: Positions: Entry Price P/L%

5/26/08: Pos#1 $41.61 +11.6%

6/9/08: Pos#2: $97.75 +0.3%

6/16/08: Pos#3: $41.50 +1.3%

6/30/08: Pos#4: $91.89 +0.19%

6/30/08: Pos#5: $58.63 +1.9%

Year To Date:

Wall Street Sector Selector: +14.5%

S&P 500: -14.0%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions, dividends or compounding.

Greed and Fear Index

Red flag is flying

Bears in control.

We can expect declining prices.

Possible strategies include raising cash, bearish options strategies, tighter stop loss points, inverse Exchange Traded Funds.

Duration of “red zone” is unknown; flag will switch to yellow or green when greed comes back into the marketplace.

Major markets continued to suffer in this Holiday shortened week and now the Dow and NASDAQ are officially in bear market territority, with both down more than -20% from their October highs and the S&P 500 close behind at -19.2%.

Our portfolio enjoyed modest gains as we closed SKF for a 33.1% gain between 5/26/08 and 6/30/08.

Also, this week we earned dividends in SKF before it was closed.

The View from 35,000 Feet

Oil continued its meteoric rise, up 3% this week and non farm payrolls were down 62,000 the sixth straight monthly drop in a row.

Heaviest losses came in construction and manufacturing and unemployment came in at a worse than expected 5.5%.

The Institute for Supply Management service sector index logged its lowest level of the year and overall things looked gloomier yet with continued pressures from rising energy prices, falling home prices and falling stock prices.

As we’ve been saying for several weeks now, we are in the seasonally unfavorable six months of the year, and combined with our “red zone” alert, expect a downward bias in the short to intermediate term.

The Week Ahead

More economic reports coming up this week that could be market movers:

Tuesday: May Pending Home Sales, May Wholesale Inventories

Thursday: Weely Jobless Claims

Friday: Consumer Sentiment

Sector Spotlight

Weekly Leaders: Precious Metals, Oil, Agriculture, Commodities

Weekly Laggards: Financials, Base Materials, Semi-Conductors, Home Builders

We had a busy week in Omaha at the Olympic Swimming Trials. It was truly remarkable to see the top swimmers in the United States perform and we were treated to many world and American records. The energy and excitement among the 12-15,000 fans in the Qwest Center was exhausting!

My son swam well, and although he didn’t make the Olympic team, did well enough to begin talks with several of the top Division 1 swimming schools in the country so he’ll be off again somewhere to restart school and college swimming in the fall.

We had a great 4th dining with friends on their deck with a great view of Mt. Bachelor, shooting off fireworks in the driveway and watching Bend’s awesome fireworks display.

I hope you’ve had a happy 4th of July holiday weekend, and in spite of our current troubles, we still live in the greatest free country in the world.

Wishing you a great weekend wherever you may be.

Your partner in prosperity,

John

John Nyaradi

Publisher

Wall Street Sector Selector

Another Good Week

wallstreetsectorselector — Sat, 28 Jun 2008 01:14:54 +0000

Wall Street Sector Selector Review

Sector Selector Update

June 24, 2008

Current Positions:

Entry Date: Positions: Entry Price P/L%

5/26/08: Pos#1: $41.61 +9.6%

5/26/08: Pos#2: $113.39 +32.9%

6/9/08: Pos#3: $97.75 +0.6%

6/16/08: Pos#4: $41.50 +0.5%

Cash

Year To Date:

Wall Street Sector Selector: +13.7%

S&P 500: -12.9%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions, dividends or compounding.

Greed and Fear Index

Red flag is flying

Bears in control.

We can expect declining prices.

Possible strategies include raising cash, bearish options strategies, tighter stop loss points, inverse Exchange Traded Funds.

Wall Street Sector Selector strategy is to buy sector ETFs that have potential to outperform S&P 500 regardless of market conditions. Duration of “red zone” is unknown; flag will switch to yellow or green when greed comes back into the marketplace.

The View from 35,000 Feet

I wrote last week, “Friday’s breakdown in the market took us below key psychological support levels, and with the advancing price of oil, paints an ominous picture going ahead,” and that turned out to be true and also a valid comment for this weekend.

This week the Dow and S&P both broke last March’s lows and the Dow now hovers on the edge of official bear market terrirory with a decline of -19.9% from its record high close of 14,165 on October 9, 2007.

This week oil resumed its charge to reach a new record and gold advanced as consumer confidence hit a 28 year low.

Furthermore, more troubles surfaced in the beleagured financial sector as Moody’s talked about downgrading Morgan Stanley.

With one trading day left in the month, June is set to log in as the worst June since the Great Depression.

As we’ve been saying for several weeks now, we are now in the seasonally unfavorable six months of the year, and combined with our “red zone” alert, expect a downward bias in the short to intermediate term.

Last week’s Hindenburg Omen proved to be prescient with the steep declines in all major market indexes that have occurred since then, and in reaction, talking heads and websites are blaring “end of the world” kinds of headlines like:

*** US stocks plunge: worst June for Dow since 1930

***Dow down more than 1100 points for June

***Blood in the street

***GM falls 11%

***Dow plunges to lowest finish since September 11, 2006

***Oil scores record gains as Fed decision weighs on dollar

From the sounds of these headlines, one could conclude that the world is “going to h— in a hand basket.” And in many ways, it is.

However, every problem creates an equal opportunity, and this is exactly the kind of environment that makes me so happy to be a part of Wall Street Sector Selector.

Because while most investors are wringing their hands and will spend this weekend shellshocked by market forces they can’t control, we can rest easy knowing we have a proven plan to follow.

While most investors spent this week listening to CNBC and watching their nest eggs shrivel up and die, we were fortunate to be making gains.

And while most investors willt spend this weekend wondering what to do next, we know that all we have to do is adjust our stop loss points and enter any new positions that the system generates.

The bottom line is this. ETFs offer you enormous flexibility and nimbleness that haven’t been available before, and coupled with a disciplined trading plan, can offer you a very attractive alternative to losing your money during difficult days like these.

The Week Ahead

More economic reports coming up this week that could be market movers, particularly the employment reports on Thursday:

Monday: June Chicago Purchasing Managers Indes

Tuesday: June Institute of Supply Management, May Consumer Spending

Wednesday: June ADP Employment Index, May Factory Orders

Thursday: June Non Farm Payrolls, June Unemployment Rate

Sector Spotlight

Weekly Leaders: Precious Metals, Oil, Agriculture, Commodities

Weekly Laggards: Financials, Transports, Home Builders

As we wrap up the first half of the year, it’s time to take a breath and enjoy the upcoming long weekend and long days of summer.

Last night we had dinner at sunset on our deck and enjoyed Mt. Bachelor, still snowy, bathed in pink in the twilight, and we celebrated my young son’s “Straight A” report card as the fading light glowed in the tops of the Ponderosas that surround our home.

Tomorrow we head for Omaha and the Olympic Swimming Trials so everyone in the family is getting geared up for my older son’s big week.

It has been an honor to serve you through these first difficult six months of the year, and I’m very pleased that so far we’ve been successful in growing our net worth and protecting our assets.

I get emails everyday from happy members, and in the end, that’s what it’s all about.

I wish I could say that there are easier times ahead but I don’t see them on the horizon.

Have a Happy 4th of July!

Wishing you a great weekend wherever you may be.

Your partner in prosperity,

John

John Nyaradi

Publisher

Our general market indicators continued turning down this week and now we have entered the “red zone” where risk outweighs reward and fear rather than greed controls the markets.

Red Flags Flying

wallstreetsectorselector — Mon, 16 Jun 2008 18:47:10 +0000

Wall Street Sector Selector Review

Sector Selector Update

June 15, 2008

Current Positions:

Entry Date: Positions: Profit/Loss%

5/26/2008: Pos#1: +4.8%

5/26/2008: Pos#2: +8.3%

6/9/2008: Pos#3: -2.5%

Cash

Year To Date:

Wall Street Sector Selector: +7.4%

S&P 500: -7.4%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions or dividends

Join Now

Greed and Fear Index

Red flag is flying

Bears in control.

We can expect declining prices.

Possible strategies include raising cash, bearish options strategies, tighter stop loss points, inverse Exchange Traded Funds.

Wall Street Sector Selector strategy is to buy sector ETFs that have potential to outperform S&P 500 regardless of market conditions.

Duration of “red zone” is unknown; flag will switch to yellow or green when greed comes back into the marketplace.

Red Flags Flying

Dear john

On Monday, June 9th, we exited United States Oil with a realized profit of +16.6% in 5 weeks and we closed our Brazil Index position with a profit of +8.0% in 6 weeks.

For the week, our portfolio was -0.6% and we were stopped out of our Gold position for a -5.6% loss.

Year to date we are +7.4% compared to the S&P 500 at -7.4% and we will continuing shifting the portfolio towards a more bearish stance.

We expect oil to retrace downwards in the short term and will look for a place to reenter before the next wave up while the International arena appears to have entered a sustained downturn.

After last Friday’s 400 point selloff on the Dow, the markets struggled to regain ground this week but were unable to move ahead, finishing at almost exactly the same level as last Friday.

This is an ominous development because oil was down 2% for the week and the dollar was stronger and both factors should have strengthened the general equities markets.

On Friday, the Consumer Price Index registered a +0.6% increase for May which was the fastest pace in 6 months and the index is now up 4.2% year over year as the cost of oil seeps into the whole economy. And gas prices hit a record nationwide average of $4.06/gallon as the summer driving season goes into full swing.

Also on Friday, the consumer registered his unease with general economic conditions in the latest University of Michigan Consumer Confidence Index which came in at a 28 year low.

Looking ahead, we are now in the seasonally unfavorable six months of the year, and combined with our “red zone” alert, expect a downward bias to the market in the near to intermediate term.

Inflation is picking up and the Fed seems to be switching its bias towards raising rates with inflation now being a larger concern than recession, and the futures markets have factored in 2-3 rate hikes before the end of the year.

Rising interest rates are never good for equities and this reinforces our view of further declines between now and the election.

The Week Ahead

A relatively quiet week ahead on the economic front but with some important reports from the housing sector:

Monday: Empire State Index for June; June Homebuilders Index

Tuesday: May Producer Price Index, May Housing Starts, May Industrial Production

Wednesday:June Philadelphia Federal Reserve Report, May Leading Economic Indicators

Sector Spotlight

Weekly Leaders: Agriculture, Commodities, Bullish Dollar

Weekly Laggards: Financials, Home Builders, Gold, Banks

Summer has finally come to Bend and we’re taking our RV out of mothballs and heading up to South Twin Lake, a beautiful spot in the High Cascades, for a weekend of R&R (finally) after several weeks of heavy travel.

With gas at over $4.00 in town, I’m happy that the lake is only 40 miles from home.

Wishing you a great weekend wherever you may be.

John

John Nyaradi

Publisher

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%.

Join Now

We Had a Nice Week

wallstreetsectorselector — Sun, 08 Jun 2008 23:50:30 +0000

Greed and Fear Index

Yellow flag is flying.

Fear is re-entering market.

Expect sideways or downwards prices

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 indexes.

Duration of caution is unknown. Flag will switch to green or red whenever greed or fear take total control.

We made some nice gains this week as the markets experienced an intense sell off on Friday. Our portfolio gained approximately 4% on the week compared to -3.5% for the Dow and -2.9% for the S&P 500.

A very intense tug of war between bulls and bears over the state of economic growth and rising inflation is playing out and the bears won this week with the record spike in oil.

The View from 35,000 Feet

Friday was a record setting day as the Dow lost almost 400 points, its 8th worst drop since 1985, and shed 3.5% for the week.

Unemployment spiked to 5.5%, the highest since October, 1984, and the biggest monthly gain since 1975. Oil surged to an all time high price of $139/bbl and was up $11 on Friday, the biggest one day gain in history, and enough to cause a mid-day trading halt.

Action was spurred by Israel and Iran talking tough, Morgan Stanley forecasting $150/bbl by July 4th, and the fact that there are only 2 million “spare” barrels per day available in the world.

Overall, it was a breathtaking day and I’m happy, of course, that we were on the right side of these dramatic moves.

Looking ahead, expect more volatility as this global drama continues to unfold. One has to conclude this is looking more and more like a recession, and coupled with the higher inflation signals coming from oil, gold and commodities, leaves the economy between a rock and a hard place.

The Week Ahead

Another busy week of market moving reports:

Monday: April US Pending Home Sales

Tuesday: Weekly Retail Sales

Wednesday: Federal Reserve Beige Book Report

Thursday: Weekly Jobless Claims, May Retail Sales, April Inventories

Friday: May Consumer Price Index, June Consumer Sentiment

Weekly Leaders: Oil, Agriculture, Commodities, Precious Metals

Weekly Laggards: Financials, China, Banks

I’m in Omaha this weekend with my son for a US Swimming Grand Prix meet and a tune up for the Olympic Trials. He had a great race in his best event, the 200 Breaststroke, and made Championship Finals, finishing 7th overall, the youngest guy in the Top 8, so he was happy with that.

Omaha is a great place, salt of the earth people, great steaks and a vibrant downtown anchored by the new Qwest Center where the swimming is happening. The downtown was dying a few years ago and its rebirth is a great example of how vision coupled with reinvestment can yield impressive results.

So, it has been a good weekend, even though I didn’t get invited out to Warren Buffet’s house.

Wishing you a great weekend wherever you may be.

Your partner in prosperity, John

John Nyaradi Publisher

A Tug of War

wallstreetsectorselector — Sat, 31 May 2008 22:26:50 +0000

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

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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

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.

John

John Nyaradi

Publisher

A very difficult week for the markets as the Dow lost -3.9%, SP500 -3.5%, and NASDAQ -3.3%.

Yellow Flags Flying

wallstreetsectorselector — Sun, 25 May 2008 18:27:45 +0000

Wall Street Sector Selector Review

May 25th, 2008

Current Positions:

Entry Date: Positions: Profit/Loss%

3/31/2008: Pos#1: +7.4%

3/31/2008: Pos#2: +5.9%

4/21/2008: Pos#3: +10.7%

4/21/2008: Pos#4: +2.1%

5/5/2008: Pos#5: +12.3%

Year To Date:

Wall Street Sector Selector: +6.0%

S&P 500: -6.3%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions or dividends

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.

Yellow Flags

This week marked a sharp turnaround in sentiment and market action as the indexes ran up against mounting bad news on the energy, inflation and economic fronts.

Unsold homes came in at a 23 year high for April, with 4.55 million unsold homes and condos on the market, an 11.2 month supply, and the excess inventory knocked prices down 8% year over year.

Oil continued hitting new highs this week and the Producer Price Index came in higher than expected; with the continued uptrend in commodities, renewed inflation concerns moved to the forefront of the news.

Oil now stands at approx. $135/bbl, double a year ago, and Goldman Sachs forecasts $200 oil within the next 6 months to 2 years. $200/bbl oil translates into $6-7/gal. gas at the pumps, so in the relatively short term, today’s prices could look like a good deal.

The Week Ahead

Another busy week of market moving reports::

Tuesday: Case Shiller Q1 Housing Price Report, May Consumer Confidence Report, April New Home Starts

Wednesday: April Durable Goods,

Thursday: Q1 GDP revision, Weekly Jobless Claims,

Friday: April Personal Income, April Consumer Spending, May Chicago Purchasing Managers Index, May Consumer Sentiment

Sector Spotlight

Weekly Leaders: Precious Metals, Energy, Commodities, Bearish Dollar

Weekly Laggards: Home Construction, Financials, Real Estate

It’s a quiet Memorial Day Weekend in Bend, cool and rainy as is typically the case in Central Oregon this time of year.

I hope you’re enjoying better weekend weather wherever you may be and that you’ll take a moment to remember and honor the many young American soldiers who have died so we can enjoy the blessings of freedom that we ofterntimes take so much for granted.

Wishing you a great holiday weekend.

John

John Nyaradi

Publisher

Climbing the Wall

wallstreetsectorselector — Thu, 22 May 2008 22:14:20 +0000

Wall Street Sector Selector Review

Sector Selector Update

May 18th, 2008

Current Positions:

Entry Date: Positions: Profit/Loss%

3/31/2008: Pos#1: +12.1%

3/31/2008: Pos#2: +8.4%

4/21/2008: Pos#3: +13.0%

4/21/2008: Pos#4: +8.3%

5/5/2008: Pos#5: +7.4%

Year To Date:

Wall Street Sector Selector: +8.2%

S&P 500: -2.9%

All profit/loss figures include realized/unrealized gains/losses and do not include taxes, commissions or dividends.

Greed and Fear Index

Greed is in control.

Bulls are in command.

We can expect uptrend in general indexes.

Possible strategies include adding to positions, buying ETFs, buying stocks, bullish options strategies.

Wall Street Sector Selector strategy is to buy sector ETFs that have potential to outperform S&P 500.

Duration of uptrend is unknown; flag will switch to yellow and then red when fear re-enters market and regains control.

Climbing the Wall

This week the markets advanced inspite of consumer sentiment hitting a 28 year low and oil prices setting a record high of approximately $128/bbl.

Supporting the markets were first quarter earnings reports that showed more than half of the non financial companies in the S&P with double digit earnings growth and that housing starts rose for the third out of the last four months.

Beyond that, retail sales exceeded estimates and the dollar continued gaining strength.

The Week Ahead

Another busy week of market moving reports::

Monday: April Leading Economic Indicators

Tuesday: April Producer Price Index

Thursday: Weekly jobless claims

Friday: April Existing Home Sales

Sector Spotlight

Weekly Leaders: Latin America, Materials, Asia, Networking

Weekly Laggards: Agriculture, Bonds

This weekend I’m in Santa Clara, California, with my 20 year old son at a big international swim meet with national teams from several countries including Australia and Japan along with many US Olympians.

It’s fun to watch these world class atheletes and I’ve also been driving around Silicon Valley where it’s equally fun to see “ground zero” of the internet and computer revolution with old names like Intel and Applied Matierals and newer names like Yahoo, Google and Netgear.

Truly this is an incubator for the best ideas of the new century; as I drove past the storied names, I could only wonder about what “next thing” is being hatched in one of those low slung office parks that will change our world yet again.

Wishing you a great weekend.

John

John Nyaradi

Publisher