New Long Portfolio
I know I said that I was going to pack it in for the weekend, but I was expecting the jobs report to be more of a downer than it was. Wah! With the market up again, albeit on very low volume, I initiated a long portfolio with the ten entries selected from today’s *Blue Plate Specials* lists: Breaking out to new highs (1), Breaking out to new highs on lower volume (3), Low-priced leaders (3), Speculative leaders (1), and Darlings of the day (2).

Enjoy your weekend!

Market notes
Another up day in the market forced us to close out all of our short positions. This whipsaw action is beginning to give Dr. Kris a headache. I’m keeping my fingers crossed that the jobs report tomorrow morning will settle the recent bull/bear standoff and push the market convincingly in one direction or the other, but my hopes will most likely be dashed and we’ll remain rangebound for a couple more weeks.

Sigh. Maybe I should just pack it all in and enjoy the rest of the summer along with my colleagues sipping a cold one under a beach umbrella. Got suntan lotion?

Blue Plate Specials portfolio update
All of our short positions were closed out for an overall loss. The fund is down 3.2% since 7/26 inception with 20 trading days.

Market Notes
Some sort of unintended program trading routine must have kicked in 15 minutes before the market closed today because that’s when the major averages gapped up only to be followed several minutes later by a fall to previous rally levels. It looks like the junior traders aren’t up on the latest software revisions.

The good news is that volatility seems to be working its way out of the market. The bad news is that it’s not affecting the major averages—they’re still clinging to support levels. One ray of sunshine in the Bull sky is that the Dow transports are moving up compared to its sister (brother?) indices, and as we all know, the Transport index is considered to be a leading market indicator.

Today’s new portfolio
Another short portfolio was entered using stocks selected from today’s New Lows list featured on the *Blue Plate Specials*. The position size is adjusted according to currently total fund holdings which is down from inception. (Initial position size was $1000.)

A quick note: I did not cover ADY today as it hovered around the $8 mark until what must have been one second before the close where it closed at $8.15. I’m not sure if that’s a spurious trade but if it’s hanging out at that level tomorrow, I will definitely cover it.

[Construction rules for these portfolios are given in the 4/21/10 blog.]

Market Notes
Broad market rally prevents major averages from violating major support levels. VIX dropping below 25 is bullish but low end-of-day Trin (< 0.6) could spell a lower open on Monday. Of course, anything can happen over the weekend so who knows what traders may be thinking on Monday, if they even bother to show up at all?

Today’s new portfolio
Despite today’s rally, the SPX is still trading well below its 40 dma which is our long/short criterion. Therefore, a short portfolio was entered using stocks selected from today’s New Lows list and the Breaking Down list featured on the *Blue Plate Specials*. The position size is adjusted according to currently total fund holdings which is down from inception. (Initial position size was $1000.)

Today’s portfolio close-out
Because no portfolios were initiated during my early August hiatus, there is no portfolio to close out today.  The next portfolio will be closed out on Sept. 8th.

[Construction rules for these portfolios are given in the 4/21/10 blog.]

Market Notes
The dog days of summer have certainly set in as the market drifts lower going into the close. The SPX and DTX both broke significant support levels at 1050 and 410 respectively. Although the Dow Industrials hit 9980, the index is now sitting right at 10,000 major support (half hour before the close). The market internals are on the bearish side and I don’t expect this level to hold.

Potentially market moving economic numbers to watch for tomorrow are consumer sentiment at 9:55 am ET and GDP (gross domestic product) after the market closes at 1:30 pm ET.

Today’s new portfolio
A short portfolio was entered using stocks selected from today’s New Lows list on the *Blue Plate Specials*. The position size is adjusted according to currently total fund holdings which is down from inception. (Initial position size was $1000.)

Today’s portfolio close-out
The short portfolio initiated on 8/11 was closed out today for a gain—yay!

[Construction rules for these portfolios are given in the 4/21/10 blog.]

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Market notes
Late summer malaise has definitely set in. The VIX is back over 25, the bull/bear dividing line. Judging by the opening gap, it sure looks like it’s going to continue upwards which is bad news for the bulls. Pundits are blaming worse than expected housing data, but honestly, with unemployment still high and showing little sign of abatement, banks reluctant to part with a plum nickel, and the end of the housing incentives, the only surprise is that today’s data actually caught people by surprise.

More potential market-moving economic reports are coming up so keep your seatbelts securely fastened. It’s sure to be a bumpy ride!

Today’s new portfolio
A short portfolio was entered using stocks selected from today’s New Lows list on the *Blue Plate Specials*.

Today’s portfolio close-out
The long portfolio initiated on 8/9 was closed out today for another loss. One thing this exercise shows is that even strong stocks will be losers during bear markets—another real-life example of why you can’t buck the trend!