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Wednesday, April 17, 2024

The Buy List – Q1 2010 (Members Only) – Update


Maybe this time we can actually do some buying!

Back on Jan 9th I posted the last update to this list but said: "Fundamentally, I still don't buy this rally but, technically, we could go up and up from here" - Not exactly a ringing endorsement and we have gotten at leas the first leg of our technical correction.   Rather than hitting our list we ended up dumping our longs into the rally and I'm not really convinced about next week either.  So far, we've stuck to buying blue-chips that we didn't even think we'd get a good shot at when I made this list.  It's all about holding that 10,000 line on the Dow now, there is no more room for error to the downside of the markets or we may be seeing 8,650, not 9,650 again.  Last time we looked at the market moves as they compared to 2004 and I noted that 2004 was a choppy and downtrending year - notice how similar our pattern is working out at the moment!

Obviously we can't rely on patterns to simply keep repeating themselves.  We could have another terrorist attack, we could have more stimulus or maybe both in our future but, until we see the patten broken, we can play for a similar move to what we see in early 2004.  Our buy/write strategy is ideal for this as it's a conservative play that gives us 15-20% downside protection.  Combine this with our usual strategy to scale into positons along with some sensible disaster hedges and we can build a nice, bullish virtual portfolio for 2010.  Keep in mind we don't fear the upside with buy/writes as our "worst case" there is we get called away with a nice profit.  

These are the bullish plays that form the bulk of our virtual portfolios and that sometimes gets lost in our weekly short-term trading. 

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