Covance, AutoNation & Budweiser

Stopped out of Covance (CVD) at $89.66 and into more AutoNation (AN), equal weight now, at 11.67. Looking for more Bud here in the 63s and UST in the 64s.

Got Stocks?

Does it make sense to even hold any stocks right now? Sure. Stomach the volatility, if you're on the right side of the tape, and keep stops tight. Don't be afraid to sell at a small loss and get liquid again. Conversely, if you're looking to go looooong, why? Don't even think about it until the S&P breaks 1365 and the NAZty goes through 2350.

Here's a look under the hood:

• AutoNation; Underweight and working, up 37%
• UST Inc.; Equal weight and stable, takeover
• Budweiser; Overweight and stable, takeover
• Heinz; Equal weight and working, up 15%
• General Mills; Overweight and so-so, up 2%, including recent purchase of 70.60
• Consumer Staples ETF; Overweight and watching closely for any hiccups, up 1%
• Covance; Underweighted, ready to sell at a moments notice, down 4%.

+.62% MTD, +.19% QTD, and -.77% YTD.

+6.4% vs S&P last month and +11.4% in the last 6 months.

Selling JNJ; 50 DMAs are concrete walls.

Sold JNJ at $69.26 based on the support level of which I'd previously posted; no JNJ remains.

All three of the major indexes interacted heavily with their respective 50 dma.

DOW (11016 -372) can't break through 11,400.
NASDAQ (2179 -95) was turned away at 2315.
S&P (1207 -48) shackled at 1260.

Remember, policy never signals a bottom. Recall all of my comments on financials signalling a bottom?

Revised GIS stop: $67.75

Freeport McMoran (FCX) mentioned on Fast Money on 9/9 around $65.

When do you buy HD or Lowes?

Capitulation? Not so much

So much government intervention is not in the normal definition of capitulation but this week's events are helping to form a near-term trading opportunity. We've not likely seen the end to the malaise but trade the market that is and keep stops tight.

Holding Tight

MTD: +.72%
QTD: +.29%
YTD: -.67%

54% cash & paper. Holding tight with lots of dry powder.

JNJ: Watch support here at the 50 dma of 69.50.
GIS: Add with a limit of $70.60; stop at 64.95; overweight position.

Capitulation in Financials?

Is this the capitulation that could signal a turnaround on Wall Street? The marketplace has been rocked by news of Mother Merrill's passing. Coupled with the recent Lehman news and it may be a recipe for the white flags, a good sign. Let the investing public throw up the white flag, wave their hands in disgust as their holdings plummett, sell to avoid further losses thereby exasberbating the fall and, voila, a bonafide buy-at-the bottom moment for those with the discipline and fortitude to do so.

Review of current holdings yields the same concern posted here.

AutoNation and EMS

Looking to add more to AN; according to the Fibonaccis, add at 11.41. It warrants a short leash, however, stops at 10.50.

Emergency Medical Services (EMS 32.93). Underweight position if it breaks above $34.54 on greater than 400k volume. Cohen holding.

Discipline

Cal-Maine continued to get slaughtered. Discipline. Being Stopped out at 36.78 helped to avoid another 14% in losses.

Discipline is also harbinger to second-guessing. Take URBN for example. I can't say enough about the management but when the stock is telling you to go, you go. That out prevented us from being involved for the ensuing run-up in the stock.

However, the decision to sell or executing upon an exit strategy is far more difficult than any decision to buy and it will prevent major losses more often than keeping you from riding winners.

BTW, stay away from Apple until it gets into the 120s.

Multifarious Morsels III

The bailing out of Freddie and Fannie is lending to continued strength in financials. The S&P Financial Sector Index (SPSY 303.43) is up another 6% since this post. A break through 302 would really build confidence that the markets have bottomed.

• Pharmaceutical Product Development, Inc. (PPDI 45.03) Spread Triple Top Breakout, watch for further strength above $44.90 to be accompanied by strong volume.


• JNPR (24.96) attempting to fill the gap up resulting from good news in June.


• Aeropostale (ARO 36.52) A move above 37.40 on 5 to 6 million shares. Double Top Breakout on September 3. Previous posts.

Altria to buy UST?

First it was BUD, now UST. I'm likin' the consumer staples this year.

Non Cyclicals looked good today

UST was up over 4% today on huge volume and no news only to fall back at the close. Add to the current "equal weight" position if it moves past $58.58 on heavy volume.

Kellogg (K) reaffirmed earnings guidance. Watch for a break above the 55s.

CALM

Interesting. I've just noticed that Cramer mentioned Cal-Maine in a short squeeze scenario late last month. Nonetheless, the position had been stopped out.

State of the Market

Financials continuing to show strength as demonstated by the S&P Financial Sector Index (SPSY 290.76). A break through 302 would be very positive. Should this coincide with a NASDAQ break through 2550 it would be a good enough long-term buy signal for me.