Last Day of the Quarter, Bulls Still Driving

Wednesday, March 31, 2010

Last day of the month, last day of the quarter. What a month for shares of Apple, up 12.6% in March alone. Apple is now the third-largest company in America eclipsing Wal-Mart yesterday. The indexes are fairing well this year with the Dow up 4% YTD, S&P 4.75% and the Nasdaq 5.8%. Chinese rockstar Baidu (BIDU) is up an astounding 44.7% YTD.

The Federal Reserve ends its mortgage-backed securities purchases today. The Fed bought $1.25 trillion in junk from Fannie Mae and Freddie Mac helping to keep interest rates low. What does this spell for bonds? 30-year Treasury futures are bouncing this morning after a poor jobs report from ADP but we'll see if there's a substantial impact in the coming weeks. I don't see Armageddon but removing a major buyer from the bid probably allows rates to drift higher. I am still short a small position in TLT to feel out the market. Bonds have yet to breakdown to trigger a full size trade.

I'm still sitting in my longs of WFMI, LVS and NKE. Wish I would have sold some WFMI pre-market yesterday when it was printing $37 but oh well. I'll give a small position down to $35 just to give it time to play out. LVS is acting a bit weak but I'm giving it some extra room based on how it trades, seems to act weak and then rip out of nowhere. I'll probably give my initial position to $20. NKE is holding up, still drifting along in its flag. The out on NKE is around $72.50. All these positions are just initial feelers and are not of make-or-break sizes. I just want to be early and feel out the stocks and learn how they trade before committing real capital through breakout levels. To review the breakout levels: WFMI, $37.00; LVS, $22.50; NKE, $75.00.

Disclosure: Short TLT, Long WFMI, NKE, LVS.
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