*Blue Plate Specials* Portfolio – 9/23/10

Market Notes
It’s beginning to look like the market is in for a sell-off instead of a minor correction as the major averages closed below recent support levels. The bottoming tail in the VIX plus the gap up on the open suggest the VIX is looking to float higher—bad for any near-term rally.

On the other hand, techs, especially internet and software stocks, were bucking today’s downtrend, and that’s something you don’t see often. What does this mean? It means that the market is bullish on the future but not so sure about the present. And what’s to love about present conditions?

Well, if you’ve been following the headline news, not a whole lot. Negative reports on housing and the job market are weighing heavily on the investing zeitgeist, but what isn’t given much press is the good news–stuff like across the board increases in corporate earnings plus the much overlooked fact that US non-financial corporations are sitting on something like $1.3 TRILLION in cash. That’s astonishing!

So why aren’t they spending any of it? Well, one reason is the political climate. Corporate CEOs aren’t sure what the Obama administration is going to do or even who is going to take control of Congress come November. The uncertainty in national and international politics combined with economic uncertainty are what is keeping companies from opening their coffers and hiring workers.

Until Wall Street can get a better handle on the present, I don’t think we can expect any sort of major rally to take place. When the VIX falls below 20 it’ll finally be safe for the bulls to enter the ring.

New Long Portfolio
As I mentioned yesterday, speculative stocks can be stellar in roaring rallies but are the first to fizzle when the market is under pressure, and so it was with many of the fund’s micro-cap holdings. The group was out of favor with the investing community today as I couldn’t find one to put on my speculative list.

Today’s selections come from the following *Blue Plate Specials* lists: Breaking out to new highs (5), Breaking out (2), and Low-priced Leaders (3).


Today’s portfolio close-out
The 9/8 portfolio was cashed out for a terrific near 10% gain. All were winners. I booked profits in Radware (RDWR) on 9/15 after a huge runup.


Tomorrow the 9/9 portfolio will be exited.

[See 4/21/10 blog for further details on how these portfolios are constructed.]

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