Sabrient Select Opportunity Virtual Portfolio
October 5, 2010 – Holding positions
Today, the market decided to stick it to the shorts — again on modest volume. The Materials sector in particular is quite strong with the weaker dollar. I closed out the final 1/3 long position in FCX on Friday in the face of formidable resistance at $90 for a 27% profit, and on Monday I looked like a genius as the stock pulled back. Then today, it broke out big to near $92. Well, as they say, you can’t go broke taking a profit.
However, you can go broke holding losing positions, so I certainly want to avoid that. With four short positions in the virtual portfolio that are now near or above my stop loss, it would seem appropriate to close them all out today for capital preservation. However, I’m just not sold that the "all clear" bell rang for an unabated fall rally. In fact, today might be simply a "blowoff top" that shakes out the shorts.
All of the short positions are underperforming the SPY today, so they are showing less bullish conviction than the overall market. I’m going to hold all positions for now.
Also, the remaining long position ENDP is looking good as it nears my 20% second profit harvesting target. I’ll hold it, as well.
Best Regards,
Scott Martindale
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