Wednesday, April 16, 2008

ALERT - Allocation & Market Sentiment Change

We are issuing a change in sentiment and asset allocation alert for all our readers! We have turned decidedly more bullish for two compelling reasons: the strength in the Transport Index and the Intel CC.

1) Strength in the Transport Index:
Transports lead the stock market and the index looks set to penetrate 5,000 and stabilize above that level. Please go back and read this post:

2) The incredibly bullish Intel Q1 2008 CC.
In a ‘chest-pounding’ conference call, management gave insight on the effect of strong foreign currencies, the continuing and expanding positive emerging market, and the effect of the weak dollar on U.S. Corporate earnings. Please see our Psychology of the Intel Q1 2008 Call interpretation directly below this post.

Although we urge you to continue to look at it as a "market of stocks', and NOT merely a "stock market", we do have a decidedly more bullish bent today, April 16th, than we did yesterday. We recommend covering all short positions, specifically BIDU and FXI. We continue to see problems for JRJC based on their subscription business model directly correlated to a rising Shanghai, and that hasn't been the case lately, so we recommend holding the JRJC short position until after the next CC in May. We recommend selling 20% of the ishares Lehman "TIP" position and buying a small position in Monster WorldWide (MNST) and China Life Insurance Company (LFC); never more than 10% in any one position please, see Commandment #1.

Thank you for you continued support wherever you may be enjoying our blog spot from, sincerely, the Psychology of the Call team.


Anonymous said...

Okay, I agree with your assessment on the mkt, good call. Not sure about LFC though. Do like MNST though. Your blog is a great fun.

Anonymous said...

LFC has been horrible for months. Currently hovering above $55 support line, but I'm not certain that it'll hold. I'd be careful. JRJC sux.

Anonymous said...

Would like your opinion on the IT outsourcing players - INFY shot up recently after quarterly reports. WIT to report day after tomorrow.

Anonymous said...

Both INFY and WIT are obviously Indian companies. Similar in that both have been hurt by banking/financial credit real estate crisis, as directly related to the outsourced IT business. The Rupee translation of late is scaring many away from the stocks as well. Rupee has appreciated and where will it stop, and more importantly, where will the U.S. dollar stop? We believe INFY and WIT are not only in a very competitive dog-eat-dog price war against each other, but also more and more versus the U.S. IT firms as the dollar flops. If INFY breaks over $45 and stabilizes, we would buy on a $2 pullback at $43, and ride it to $55 with a stop loss at $38.75. Be patient, and remember the U.S. dollar is so weak, IT may start coming to U.S. from India. Sound absurd? Perhaps, but that's how "psychological financial fusion" could play out. Last point… look to the medical device sector, specifically "ISRG", for better competitive advantages and currency ADVANTAGES, not disadvantages. Why fight FX ??
Hope that helped.

Anonymous said...

thanks for the analysis.

Anonymous said...

Very very courageous call on the market, you people are way better than average.