George Soros: The Market to Lose an Icon
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| HILL | Long | 1/31 | +55.5% |
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The market weakened a little on Monday. Fears spread that the U.S. government would default on its debt obligations, which spurred a big sell-off in China and impaired the U.S. indices for most of the session. Treasuries fell substantially as bond traders demanded higher rates after law makers in the U.S. failed to produce a 2011 budget.
Despite a mild price decline, the indices experienced heavy volume selling. All sectors fell and only utilities and big cap technology stocks held value.
Amid the modest decline the TradeMaster portfolio added two new positions.
The first position is a Chinese stock highlighted in our weekend video to members. That stock will also be a part of a special micro cap Chinese report I am finishing up this week. The report will be available to TradeMaster members as early as tomorrow.
Also, and from the video, TradeMaster went long RCMT. This trade is riskier than most I take - and I do not trade this type of stock often. But the upside was worth it. In fact this is a speculative trade and taking a small position is what I would recommend. Also, shares are volatile and if price moves against us our stop will be hit rather quickly.
Initial stop is placed at $5.25, about 6%. The first target to the upside is $5.95 resistance, which I think we will take out. From there we should rally up towards $7, or 30% higher.
Finally, I offer a salute and a farewell to a market legend. Brilliant and highly controversial trader George Soros is leaving the world of finance. The hedge fund genius announced he will exit the management business this year after 38 years in the biz.
Perhaps his most memorable trade was when he "broke" the Bank of England in 1992. But even as recent as this year George Soros was making bold trades (and winning) with gold. The departure by 80 year old Soros certainly explains why the Quantum Endowment Fund exited 75% of long positions this spring. Much can be learned from Soros and he is perhaps the top momentum investor of all-time.
The market is down a little again this morning, but the Nasdaq looks strong, and weakness is really only prevalent in industrials and financials. I noted last week that bank stocks looked ripe for a bottom - and I stand by that analysis until a fresh low is made in XLF. In fact, I am long BAC as of last week and I expect another 7.5% rally to $10.70.
Send comments anytime to editor@trademasterstocks.com.
