Better Than...

Today was a whopper of a day. RIMM was up 20.77% or $34.40 a share and continued to set a new high after the close. It sure feels good to hold a large stake in a stock when that happens. The rest of the list was firm, too, with the usual suspects posting gains. We'll see what the weekend brings to AAPL and T as the much- (or is it over-) hyped iphone is introduced. For what its worth, T set a new high today and AAPL moved up another $1.48 so that may be a "tell" about what's coming Monday. Remember that T is the exclusive carrier for the hype-phone so they stand to benefit nicely.

As I see it, June was the pause that refreshes. $70 oil and a surge in interest rates did little to derail the party and now we are at the threshold of earnings reports with the market coming off the month's lows. If those earnings reports are the least bit above expectations then the market will be most rewarding in the short term.

The bad news is that the year is half over!

Do Not Gloat!

It's always important to stay level and calm as an investor, unlike the image of the frenzied pit-traders that we can all visualize. However, anyone who has made money in the market knows that big wins are an aphrodisiac and the thought "this is almost as good as the best thing in the world" comes to mind when the big score happens. Today Geller Capital and its clients are rewarded significantly for holding RIMM. In the afterhours market the shares are up about $26 above the $2 gain during normal trading after posting blowout numbers. Readers of my blog will recall that just a few days ago I noted the probability of this happening when the stock was sliding towards $161. Now, $192. Earnings, Revenues, and Subscriptions were reported better than expected. Guidance for the August quarter was raised as well. I didn't even consider a split but we'll take that 3:1 that was also announced. (Big splits are another thing to worry about as it makes it easy for investors to take some off the table and that softens an advance. Frankly I will consider doing the same on this spike but think that maybe a short squeeze gives us more tomorrow.)

Your portfolio manager is definitely worth his salt when he (i.e., me!) can read the signals on the street and look beyond the daily grind. It became apparent to me that RIMM is in transition from a mostly business-use product to a consumer products company. The market is clearly much greater for the latter. Concurrently, despite all the pre-iphone hype and the fast run in AAPL from 90 to 127, the market will take a serious look at that stock tomorrow. Players will realize that the demand for a communication device that combines the basic handheld features with reliable on-the-go email is very desirable. This news officially moves email off the desktop and into the handheld. Wrapping it up with a phone, ipod, photo album, etc. may be too much for consumers to avoid. Palm might be a better device but think betamax/vhs and say goodbye to Palm, Nokia, etc.

Investing in these pricey hi-tech cos is tricky. RIMM and AAPl could give it all up tomorrow on some unexpectedly bad news but my mentor taught me that big market winners are hard to buy into and so easy to sell. They're a fight to hold onto yet one must remain flexible and adjust to shifting winds. This news should energize the tech sector tomorrow as well as the whole market. The June correction is halfway over so hang in there! Stay tuned.

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The Pause That Refreshes?

June 1st or 4th. That was the peak for most of the market indices. Since then the market has bounced within a 3-4% range. The Small and Mid indices are more toppy looking than the Large indices but that may be a function of their stronger rallies to date. On the surface, nothing looks really bad and most look like they have sold off towards bases and are establishing good backing and filling action. The single most troubling items are the softness in the A/D line - the generals cannot rally indefinitely without the troops - and failure of the new high list to surge ahead. On a 10 day moving average basis, the peak in May/June highs was lower than April that was lower than February that was lower than December. Bad trend there. Looking into the stock list gives a mixed bag. The best stocks are still doing their thing...TU, CBEY, SBS, DECK, GOOG, AMX, PCU, OSG, these are all good. But GS may be topping as it cannot escape the gravity of BSC, LEH, MER, etc. AAPL has put in a short term top but has gotten so far ahead it really needs a rest. Note how AAPL peaked right into the much hyped launch of the i-phone - buy the rumor sell the news sort of action. I don't believe AAPL is over but expect it to lay low until earnings are released and news/numbers of the i-phone launch are confirmed (mid July). RIMM is a little soft and i attribute that to concern for earnings but I expect a blowout from them as their new consumer products have been well received as far as I can tell. We'll see about that soon as well - this Thursday or Friday. Any lower on RIMM without a volume surge or trend/support violation and I might take advantage of that weakness, too.
Mostly our market action has been limited with a few positions stopped out during the month. Yesterday we sold a number of stocks that appear to have topped out and which I have little faith for strong performance from here. Overall, it's all ok. It could take this market no time to repair itself or this could be the beginning of the end. We all know that the market is capable of nearly any move in the short term. However, best bet is a consolidation that lasts another 1 - 3 weeks. Most of the downside price action has probably occurred and this is just time and volume filling in. I would expect that if earnings are good then stocks will launch themselves higher off the base that has been built since the first trading days of June. As always, stay tuned!

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

Another day...

Today was a constructive day. The indices didn't make a lot of progress but advances led declines more than 1.4:1, new highs better than 4:1. Recent big winners AAPL, RIMM, GOOG, and CBEY faded but others in the portfolio took the lead. EXPE, TU, PCLN, RL, CI, GS & GD shot ahead and carried the day.

As follow up to yesterday, this is the benefit of a moderately diversified and well managed portfolio. Lots of good names will yield a bunch of winners in this type of market. Sometimes the key winners need to rest and it's nice when the second tier players jump in and rise to the occasion. Of course they are stocks and they don't know they are being counted on to rise to the occasion but that's the stockpicking part of portfolio management. Picking stocks isn't about what you like, it's about judging what the street likes. Sort of like a beauty contest - the viewer tries to pick not the prettiest contestant but the contestant the judges are most likely to consider prettiest. When done right the portfolio is always being pushed ahead by the pretty girls, uhh, i mean stocks that the street also wants to own. This takes a lot of pressure off the account's biggest winners to continually produce -something that is statistically unlikely.

On the flip side nothing misbehaved badly enough to get tossed but tomorrow is another day. Weeding the losers is what we do while we let our winners run!

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

Stockpicking

The key to great performance is to pick great stocks and to manage those holdings through the effect of various market conditions. If one buys 'right' in terms of selection and price then many ills are cured. Buy a winning breakout right in time and the ensuing correction is easy to handle and live through. Pay too much and at the beginning of a pullback and you'll be out of rhythm, prone to mistakes.

Understanding this, and much more, can bring outperformance. Today was a great example. Last week the bulls won a decisive battle and rallied right back to the old highs. With no major news over the weekend, the bias was to reposition, tighten up on stops and losses, and prune the portfolio. All that selling dropped the market 12 bps but the bulls kept buying a dozen solid winners of ours and generally the list was higher. Looking under the surface check out stocks like PCU, RL, DECK, MTW, GME, OSG, GOOG, RIMM, RCI, AAPL, DHR, that were all up nicely today, at or near new highs. On the down side there was little that hurt us badly, a few that dropped more than i'd like to see but that's ok becuase you can live with a few clunkers in a winning portfolio. The trick is what to do with them and how quickly. My main thought as we face a potential quarter-ending-window-dressing-meltup rally is that which stops working and starts to fade should simply be sold as we get into the July 4 mini break. Then we are playing slightly more aggressive stocks in a strong market but tolerating little weakness. Over the coming weeks we should build up enough cash that the next rebalance or unexpected opportunity will occur and we will be in shape to add at better prices. Nothing too extreme but enough to make the "trade" a good one. Bull markets reward mightily and also give the occasion blip that can be taken advantage of when you are playing with a lead.
So, we stay long the great stocks we have picked and expect good things but keep a foot on the brake pedal to manage the whole portfolio towards achieving our goals. More on that another time. Enjoy the gains!

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

Don't Count a Good Market Out

Last night was feeling like the decline was about to accelarate and take hold. And then just like that buyers abound and rally the market. Leading stocks also came back with a vengenance: SBS, OSG, GS, CBEY, RIMM, SCI, EL, AMX, to name a few. Two things happened today - the market tested/held last week's 1487 low and the market closed above Monday's high. These are very short term observations which make them somewhat suspect but its certainly a step in the right direction. Also, the market landed in the range I proposed for this correction low. That's merely an educated guess and we were not high fiving today that the danger is passed. However, it's encouraging that the market rose on good volume, breadth was excellent, and new highs expanded. Utilities came on strong as rates fell and that's a must. As go bonds so goes stocks. Stay tunes for more...

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

5.21%

That climbing yield on the Ten Year is making the wall of worry more of a palisade of insurmountability. At 5.21% its caused the tone to get really bearish very quickly. Where are we headed?

In the greatest bull market, prices correct and the bull notion gets thrown in the garbage for a while. That is probably what is going on now. The underpinnings of this rally included high liquidity that financed the private equity led m&a boom. Higher rates cause dark shadows to come across the stage. Of course, the fact that the market rallied 11% in 11 weeks and 24% in 11 months is ignored. Markets are made of buyers and sellers and buyers have been in control for some time now. After a big run they often pause, rest, reassess, etc. That is what a correction really is - the maximum strength of the buyers is reached and sellers begin to dominate. If the bull case is still intact it won't be long before better prices cause the buyers to reassert themselves.

Another little point is that the correction set in the moment the S&P nicked the old high set in March 2000. One of my maxims of this market is to generally avoid stocks with overhead resistance. The market is dealing with overhead resistance now. Those waiting to breakeven are finally getting their due and that's part of the pressure on the market.

The decline will either stabilize here at the 50 day MA or go a little further towards the 200 day. My estimate is the decline falls within 1495 and 1460. The last month of the quarter can be a vacuum for good news. Most companies are on a calendar fiscal so there's not much for them to say at this point. If they pre-announce, pre-announcements tend to be bearish and they tend to come in the last month of the quarter.

Now is the time to go through the portfolios and clean up - eliminate dead wood, eliminate losers that are violating the stop loss range, prune winners, etc. Replace them with stocks that are behaving the way you'd want your stocks to behave in a correction - they are the ones that will likely lead the market higher. As the market corrects and rotates, there will also be new groups that come into play. It seems like the medical group is waking up will be part of the next crop of winners. Utilities, big winners the past year look like they are done for a while.

For further information contact info@gellercapital.com.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

Ugly Day/Opportunity

Ahh, that's better. More than a little air was let out of the overinflated balloon today. Check out the market stats: declines swamped advances 11:1, down volume 17:1 over advancing, new lows exceeded highs by 4:1. If I recall correctly, the last time that happened was late February when the market fell about 5% in one day. NYSE volume rose to 1.9 billion shares and that is clearly on the high side. Net net, today the market cleared out a lot of fluff and is probably closing in on a bottom. The S&P is about .3% points from its 50 day MA, the Dow about 1%, mid caps about 1%, and small caps just about hit the 50 day line. Transports closed below the line as did Utilities and that poses a striking negative to the "market is close to a bottom" theory.

Of course the rally-interrupted may be searching for the 200 day MA. That would be another 5% down and not out of the question. The fact that the interest sensitive utility index is getting crushed and in a confirmed downtrend is very troubling. Bond yields SOARED today and until the market accepts this as ok or yields settle down we are in for more trouble. The weakness in bonds cannot be overlooked.

Interesting how easily market strength disappears but we must also remember that bull markets should get the benefit of the doubt. I still believe the long term bull is in place and this is simply a reversion to the mean (the mean being the 50 day or 200 day ma). My goal is to put the excess cash in the portfolios to work as early as tomorrow. If the market continues to slide then losing positions that should be sold will be replaced with the better names that have not broken down. Corrections always hurt but they also present an opportunity to clean house and restock the portfolio with the best names. Stay tuned...

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.

Midday Comment

Today the AD line is skewed heavily to the downside at about 5:1 and volume is running about 10:1. Total volume does not seem to be high and that suggests two perspectives:
A - the low volume is evidence of little sell pressure and this "dip" should be bought
or
B - the low volume means that the selling has not climaxed and there is more to come.
I'll opt for b. The various indices are still extended and a good 1 - 2% above the 50 day MAs. There are other measures to consider but that would be the first target. Of greater concern is the continued deterioration in the bonds and utilities. I would prefer to see this stop so the market can stabilize. Overall there are many concerns but I think another day or two of this will produce better prices/bargains. Maybe when they throw in the towel on market leader AAPL we will have found a (temporary) bottom.
That is all for now...

Mini Blog Vacation

It's been about a week since I last checked in and on the surface not a lot has changed in the market. The indices are about the same level to slightly higher and the A/D line has improved moderately but there is some underlying deterioration. The market is less overbought at this level than it was at previous peaks, up to down volume has lagged during the same time frame, and new highs are not expanding to increased levels as the market has gone higher. Probably the most important thing that has deteriorated are bond prices. Yields are above the January peaks and are now at 10 month highs. Utilities, a big market leader for the past year plus, are now being sold aggressively in sympathy with bond prices. This factor can singlehandedly derail the stock market for a while but its important to know whats driving yields higher. If inflation worries are moving yields up, that's probably bad for the overall. If its rising economic demand that's pushing the price of money, investors will find solace in better earnings that will help move stock prices up.
The mess in China is the excuse for the selloff today. Almost as if investors thought better of yesterday's rally and decided a little more cash would look good in the portfolio. Just so happens that our monthly portfolio rebalance occured the past few days and we did put less to work than we took off the table. The goal is to get that money to work but it would be nice to pick up some bargains in our favorite stocks.
About those bargains...at the end of the day, a day that showed declines outnumber advances 3:1 and volume 3+:1, GOOG, AAPL, RIMM & DECK set new highs. LYG, AMX, CI, & CBEY, some of our other favorites, closed higher. CTL, SCI, GS, ARW, KNOL, NFS & TRV all were down less than the market. Net net, players are not letting go of the strong ones and the right stocks will not give much of an opportunity to buy them lower. If it happens, it will probably be a very narrow window of opportunity.
Things are always a challenge on Wall Street and today is more of that. The trend has been solid, the wall of worry is there and most of the best stocks are still behaving well. So we'll stick with it but intelligent portfolio management will make a big difference here.
Visit our website to review information about our strategies and results. www.gellercapital.com

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.