Go With The Momentum Part I

Headlines in a Yahoo! Finance article on http://finance.yahoo.com/ stated that sluggish Economic Data and Financial woes were the reason the markets dramatically decline today. The DIJA itself was down (-1.06%) ending the trading at 12503.82. I just wanted to say that this is simply not accurate. Now, the financials are definitely one of the reasons the market was down today, notably the downgrades by Standard and Poors of behemoths like Lehman Brothers, Morgan Stanley, and Merril Lynch. The ISM numbers for the month of May were actually higher than estimates predicted, which was a very good thing! Now don't get me wrong, the numbers weren't great and technically they were in a range signaling a steady contraction but they were only off .04 from the comportable index value of 50. for manfacturing activity. The real story of the day was the positive export numbers reflected in the ISM numbers, which has consistently came many companies poised to take advantage in profitability and real GDP growth out of the negative territory for the past consecutive quarters. The obvious reason for this trend is clearly the weak U.S. dollar and what also brings me to a interesting mutual fund called the Fidelity Export and Multinational Fund ticker (FEXPX). Currently the mutual fund is down -4.74% YTD, however the list of its top 10 holdings provides a nice list of companies well positioned to do just what the doctor ordered. This post is Part I of III where we will talk about this very topic and follow these top ten holdings to see if there is any favorable trading opportunities in them. This list is as good as any and we are going to follow them for awhile to see if they turn out to be winners. One thing you have to do when trading is you have to develop your own list of stocks you follow whatever system you decide to use but just don't let it be a stock the financial media is recommending. We're going to go with these.

The Beginning of the Week is in Full Swing

Today is June 2nd and it is now 1:50 AM in the morning and also the morning the ISM manufacturing survey will open up as the first piece of economic data for the month. The reason this data is so important is it provides information from purchasing managers on manufacturing activity from the previous month and thus provides clues to whether the economy is healthy or teetering on depression. In light of last week's GDP numbers, which were revised upward to 0.9%, a positive ISM reading at 50 or slightly higher will really give this market the ability it needs to get over the hump. You should expect relatively flat trading until these numbers are published.