May 21, 2010

Monster Market Review:

 

U.S. stock futures declined Friday after the previous session’s pounding that sent markets into a correction territory as worries over economic growth persist.

U.S. stocks and a range of assets across the globe tumbled on Thursday, hit by a combination of weak economic data, regulatory concerns and debt worries in the U.S., China and Europe. Breaching of key technical levels added to the decline.

The Dow Jones Industrial Average dropped 376 points, or 3.6%, to its worst close since Feb. 10, putting the blue-chip index over 10% below its April 26 high.

A decline in German business climate and a three-month low for a euro-zone manufacturing purchasing managers index didn’t help turn sentiment in Europe.  The euro traded over $1.25 and is substantially above lows from earlier in the week. The lower house of Germany’s parliament, as expected, approved its contribution to the 750 billion euro ($946 billion) European Union-International Monetary Fund, and traders are awaiting a meeting of finance ministers in Brussels to see if other European nations follow Germany with a short-selling ban that roiled markets earlier this week.

The banking sector will be in the spotlight after the U.S. Senate approved financial reform legislation. The fate of several key provisions, notably the derivatives activities of banks, still need to be hashed out when the House and Senate meet to combine their respective bills.

Overseas, the Nikkei 225 ended 2.5% lower in Tokyo, while the Stoxx Europe 600 index dropped 2.6%, with much of the losses coming as traders in New York began to arrive.

Monster Portfolio Review:

This week has been a mixed bag for closed positions; TZA & CSIQ booked for a total return of 22%, while we were stopped in BEE, EXM, and ISSI for about (17%). Total return should be about 5% for us.  Considering what the markets are doing – not too bad. Our open poisitions look good with MI being the only one not participating right now.  MI was about a dime away from its target before this selloff occurred.  With the financial reform bill close to being passed we want to hang onto MI as we believe financials may ramp up afterwards.  MI has always been a specualtive take out target too.

We may see a few of our shorts hit there targets today.  We will also be looking to see if a test of 1050 on the s&p holds or if we break below that and test the 1020 level.  This afternoon we may look to add a new position or two to position ourselves for next week.  Lets be patient here but be ready to act today.  A monster move with profits is what we need right now.