It appears that there is enough bullish sentiment that the market continues
to hold up with "bad" news out there daily. By this, I mean that many companies
are achieving or over achieving versus analyst expectations for the quarters
they are reporting on. It seems that most of these have been taking down future
guidance.
As of last night, both McDonald's and PepsiCo suggested they see continued
growth, counter to what most other companies have been reporting. Both of these
companies are in the food/restaurant sector. As we have been discussing, in
the weekly alerts, food industries continue to be performing well. This is
related to their defensive nature and the fact that profits are up in this
sector.
We entered two short trades yesterday. While an entry to SPY at the limit
price ($135.00) left us behind by eleven cents, the entry into LRCX was really
a difficult entry.
LRCX traded as high as $49.10 in the afternoon yesterday, and in after hours
trading was up to over $51.00 before it sold off down to $51.40 when the company
guided lower in the future. Our model entered the short trade at $47.00, but
we are confident (based on responses from subscribers) that most subscribers
had a significantly better entry point.
We expect some sloppy trading today for LRCX and we expect that SPY will open
higher. Put a stop in for LRCX at $49.00. Recall that initial stops don't trigger
with intraday trading, but rather, by a close over that amount. Once the stop
gets moved lower, to protect profits, then it can be triggered by intraday
trading prices.
We continue to believe we are near a market top, so please be patient.
Please feel free to send emails with any questions you may have.
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