Portfolio Management for April 11, 2014

As you have probably noticed, the weekly stock selection "rolled" yesterday and on average gained 4% between the open and the close, with half of the positions gaining more than 4%. This is an indication of a general market failure. Under these conditions, using leveraged ETFs is the easiest and safest way to handle the situation.



Today's list is below. I am mostly interested in a BIDU and IGT short.







Although the stock picking element selected CBST for example (Pharma,) CBST is oversold and is attracting money. It is almost a BUY here. As a matter of fact, CBST is a buy here because it is bouncing off its 200MA on a positive EV, but it is a short if it either falls below the 200MA or bounces back to the $70 resistance level on weak EV.



VNDA is also a BUY oversold stock here. Both VNDA and CBST indicate that shorting oversold stocks that belong to oversold sectors could be dangerous. We need to carefully navigate these waters.

My strategy is to look at buying QID/TZA on an early bounce, but I will avoid the long oversold trades until there is a stronger pull-back, which could come this afternoon or on Monday.