During the next five trading days, we’ll be saying goodbye to a few things, such as trading during the month of August. Labor Day weekend brings an end to the summer, putting us in the throes of Back to School spending, last-minute vacations and similar activities that will give us low trading volume during the coming week. While it will be a little more exciting than watching paint dry — we do some have some economic data and corporate earnings on tap this week — it will be far quieter than usual. I suspect the market will drift sideways in the coming days before the Labor Day weekend.
Gearing up for September? Once the holiday weekend is past, it’s typically back to business. But in my view, there will be some items weighing on the stock market in the coming weeks. We have to face another round of government shutdown talks, the potential sting in the economic data of sequestration-related furloughs that are happening now and, of course, more Fed tapering conversation. As I wrote in the September issue of PowerTrend Profits, these and other factors had me in a more cautious position for August — I have been far more selective in adding new positions and my subscribers have opportunistically booked some big double-digit percentage profits as we used the last few weeks to add what I call PowerTrend contenders to our watch list.
The watch list. One of the secrets of the Wall Street pros is to have two teams of stocks — the ones you want to own now and the other filled with public companies that you will keep your eyes on. Given the nature of PowerTrend investing, I’m looking at dozens of companies each week. In order for me to put them on my must-have list, they have to not only survive my triple filter process that weeds out the pretenders, the shares also need the prospect of at least 25% net upside for me to get interested. Using that 25% net upside as a threshold helps me deliver big profits to my subscribers, while also avoiding pitfalls.
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