Giving this Bull a Rest

By Jim Pearce • December 9, 2016

With the next FOMC meeting coming up this Tuesday/Wednesday, I am holding off on issuing a new buy alert until after they make an announcement regarding the fed funds rate. Although a rate hike is a near certainty at this point, what isn’t clear is to what extent that may trigger a wave of bond selling that could in turn temporarily cascade over to the stock market. For that reason I am going to wait until Thursday of next week to issue the next alert (and I may issue more than one alert that day or the next, depending on how the days leading up to then play out). 

I am also bumping up the stop price on DLPH to $69, and on BKE to $25 since both of them are trading well above their 50DMA and would be most susceptible to a stock market pullback, if one occurs. Hopefully the global financial markets will digest next week’s events with minimal turbulence, but with the U.S. stock market at a record high after several weeks of strong performance I just think it would be prudent to pull in our horns a bit and give this bull a rest. We’ve booked three nice gains in a row during the past month and I don’t want to give too much of that back if we see a lot of selling next week. 

I know we promised you 3 – 4 new buy alerts every month and we will fulfill that promise in December, but given the unusual nature of the current circumstances I am going to go about it a bit differently this month. Whether you agree or disagree with me, feel free to share your thoughts using the Stock Talk feature beneath this article as I value your input. Thank you.

 

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Jim, This is a a wise decision on your part.
I think it is far better to NOT be a Bean counter, and risk sending us a Non – Performer.
Speaking for myself, I need the moolah on a regular basis since I am trading for at least part of my living.
I have complete confidence you will be sending us the creme de la Creme.
Have a good weekend sir.

Jim Pearce

Jim Pearce

You too. But let me know if you get desperate for money and I’ll give you a very short term put recommendation on Monday. 🙂

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As long as DECK just fades away which I am waiting and hoping it will do, then I will be covered for my combo birthday/Christmas present for my wife. She works hard for the money as Donna Summer once sang – at a local Hospital.

Larry Johnson

Larry Johnson

Ha, ha….JIm Pearce….you KNOW I’ll take that PUT even though I’m not desperate for money (not yet anyways)….Have a great weekend.

Jim Pearce

Jim Pearce

Okay Larry, I just issued it so have fun with it!

Dramatic License

Dramatic License

Sounds good to me. I’d rather get winners than dogs, and I’d rather get winners that don’t take that initial dip 🙂 . That’s why there has to be a human element to computer projections.

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I turned my limit order to sell to an OCO since you cautioned us on a downside for BKE. When I put in the limit topside I was overly optimistic, now that I am taking your advice on thinking in each direction, I will be ready for either. This is for BKE I have been out of DLPH for awhile.

Larry Johnson

Larry Johnson

Sounds like a well thought out plan and conservative approach to me, Jim.
The market is generally over-bought right now, and with a rate hike thrown into that mix, it’s spells a pull-back, IMHO. We shall see.
FYI…in anticipation of next week, I unloaded several in-the money (non-SW related) calls that I’d been holding at the peak of today’s market. Funds that will be used to “fight another day”…..LOL.

Janis Bell

Janis Bell

Jim and others, I didn’t put in the stops (until BKE and DLPH)–just learning how to do this stuff! — but after reading this, I think I ought to do this Sunday as I’m traveling overseas Tues and Wed with no guarantee I can get online. The question is this: now that I have small gains in some of the others, should I put the stop in a little higher than recommended at the time of purchase?

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Habve you already put in the stops Janis?
One thing to remember is the people at your broker should be glad to help you and you could jot down what you did to help you on another time.

Here is a quick story on what I forgot to do. I did not remember to write in GTC – good til cancelled so while I did put in my oco [one cancels other] order on friday. This is good because it tells the computer to sell if it reaches your target above , but if it goes down you are covered there too, but Don’t forget to add GTC.

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