WHAT TO DO NOW: The minefield environment for individual stocks remains in place—today, Academy Sports (ASO), after showing solid support earlier this week, is falling apart with the group after loose peer Foot Locker (FL) is being taken apart on earnings. We’ll dump our remaining shares today. That will leave us with around 74% in cash—there’s a good chance we’ll put some to work next week if the market hangs in there, though with the meat grinder still intact, we won’t jump in heavily until we start to see more individual leaders and major indexes kick into gear.
The big-cap indexes and most stocks are down a touch today—as of 12:15 pm, the S&P 500 and Nasdaq are both off around 0.2%.
As we mentioned in yesterday’s issue, the overall evidence is mixed, but individual stocks continue to walk through a minefield, with some doing OK but many blowing up on news or rumors. Today it was Academy Sports, which admittedly wasn’t looking great but did show support this week—but today’s implosion by Foot Locker (FL—down 28% as of 12:15 pm) is hitting the entire group (including DKS). ASO could bounce, but we’re not going to just hold and hope; we sold some at much higher prices and, while disappointing, will sell the rest today to prevent further slippage. SELL ASO
That will leave us with a cash position near 74%—we’re likely to put a little to work next week if the market’s recent strength continues, as there are some enticing stocks. Today, though, we’ll sit tight and see how things play out.
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