The three major market indexes edged up again on favorable earnings reports

The three major market indexes edged up again on favorable earnings reports and actions by the European Central Bank (ECB).

Keep in mind there are more than 5,000 listed stocks – the DowJones Index includes only 30 of them, the S&P500 Index lists 500 (actually 502) and the Nasdaq Composite lists 3000, so none of these indexes fully represents all market action.

Despite the indexes finishing up, among our stocks again the price trends were a mix of risers and decliners.  And for the third week in-a-row most trades are long-to-short as institutional investors take profits or simply exit out of caution.  It’s as if institutional investors are anticipating a market downtrend on the horizon – which would not be unusual considering how far the market has risen in the past 12 months.  With many of our stock positions only a few weeks old, too soon for significant gains to have developed.

Still holding some positions that after analytics were adjusted in August were counter to the current price trend.  While some have cycled through that counter-trend and are now recovering, some remain stalled or even worsening – dampening our total return – such that hindsight suggests it would have been better to have adjusted these positions immediately in August rather than let them recover over time.  Exits from some of these positions are likely soon – a lesson learned.    

Highlights:  4 new weekly highs in long positions.  5 stocks with double-digit long gains:

     FIVN +17%        HUN +21%                                                    BZH +58%                                     LPSN +102%           

     URBN +16%                                                                              

No new weekly lows among short positions.  1 stock with double-digit short gain:

    EVTC +16%

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