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Mike Cintolo discusses two simple portfolio management techniques investors can use during a market decline.

In 2011, I see an oil Goldilocks rally—not too soft, not too firm, just right.

How to determine which publication is best suited for your investing style.

Current Market Outlook


The major indexes have done a decent job of holding above the August 24 lows, and a few stocks and sectors have pushed to new high ground. In the short term, we still think further upside testing is possible, especially if the Federal Reserve issues some reassuring words later this week. However, it’s going to take more than just another couple of good days to turn the market’s trends back up—right now, all of the major indexes (and the vast majority of stocks) are still buried beneath resistance and are trading below key moving averages. Thus, we’re sticking with our defensive stance—the onus is clearly on the bulls to re-take control.

This week’s list has another batch of potential leaders; there’s not many defensive stocks making the list, which is encouraging. Our Top Pick is Royal Caribbean (RCL), a big-cap leisure stock that has a strong chart and big earnings estimates.

Stock Name	Price	Buy Range	Loss Limit
WellCare Health Plans, Inc. (WCG)	271.83	92-96	86-88
Virgin Airlines (VA)	0.00	33-35	30-31
Tempur Sealy (TPX)	85.53	74-77	68-69
RH Inc. (RH)	252.93	97-99	85-86
Royal Caribbean Cruises (RCL)	0.00	90-93	85-86
Neurocrine Biosciences (NBIX)	123.40	51-54	46-48
Martin Marietta Materials (MLM)	261.52	170-174	158-160
Clovis Oncology (CLVS)	0.00	98-102	86-88
Amazon.com (AMZN)	2.00	510-530	460-470
Abiomed (ABMD)	0.00	90-95	85-86

These are confusing times in the market. It looks like a soft landing for the economy is more likely. But that’s no guarantee. We could still have a recession next year. The bull market could rage on or pull back. Instead of betting on the economic cycle, it’s a time to focus on individual stocks.

Artificial Intelligence (AI) exploded onto the market scene in a huge way in May when semiconductor company Nvidia (NVDA) blew away earnings expectations citing much higher demand for AI chips than anyone expected. It added another leg to the bull market as AI-related stocks soared.

This Friday is the expiration of our six April Covered Call positions. I would categorize these six positions as a good, but somewhat mixed bag, as only one trade looks like it will expire for its full profit potential (ANF), while four (TRIP, SUM, AMKR, AZEK) are in good shape but may need attention in the week to come, and one (ZI) which is mostly trading at a breakeven. As is always the case, I will update on where we stand with these expiring positions Thursday afternoon or Friday morning.

The stock market added to its gains last week up for a second straight week with the S&P 500 up 1.2% while the Nasdaq jumped 1.7%. Of note, February expiration is upon us this week. And all three of our February positions (Alcoa, Kohl’s and Snap) are in great shape, and likely to expire for full profits. But rest assured I will send you a full breakdown of these positions on Friday morning prior to expiration.

Today we are going to keep the profits rolling by selling a defensive covered call in a recent earnings winner.

Sparked by an inflation data point that showed some signs of cooling, the market surged higher last week. The S&P 500 gained 6%, the Dow rose 4% and the Nasdaq gained a whopping 8.8%.

This week is the expiration of eight of our positions. Expect to hear from me on how we will manage these trades Thursday afternoon or Friday morning.

This week’s covered call idea is a company that is growing fast, and is doing the good work of helping families overcome a problem.

We discussed a couple of weeks ago how early January is usually volatile, and this year has been no different—in fact, with the headlines out of Washington, D.C., Georgia and more, we’ve seen even more whippy action than normal, with big moves in the indexes and especially among individual stocks and sectors, with 4% moves up and down happening nearly every day.

The iffy up-down-up-down action in leading growth names starting in late January led to some key breakdowns last week, and this week, growth stocks have been routed—the Nasdaq is down nearly 4%, but most leading names are off much more than that, with many coming completely unraveled.

Two of our stocks reported earnings last night.

The ping-pong action of the market has continued this week, with quick, sharp fluctuations based on daily (and often intraday and even overnight) news and rumors of the progress (or not) of the U.S.-China trade negotiations, including this morning’s good-looking pop. Frankly, we are encouraged by the action, but to this point our stance hasn’t changed.

As for the market, it’s been an interesting week and a crazy month. After last Friday’s plunge, stocks have bounced back strongly, with the S&P 500 and Nasdaq both up more than 3%.

Our position hasn’t changed much since the start of the week. We’re relatively cautious (though not outright defensive) and stepping lightly as we wait for the market to confirm a new uptrend for leadership to take shape.

Cognitive biases are a natural consequence of being human, but they can significantly hamper your investing success. Let’s explore what they are and how to combat them.

I know that you’ve probably been reading headlines about the perilous state of the Chinese economy, and you think that investing there is too nervous-making to attempt. I have two pieces of evidence to help convince you that adding some China to your portfolio is a good idea. First, let’s have a look at a daily chart of PowerShares Golden Dragon Halter USX China ETF (PGJ) showing its performance during the last six months.

If you had a way to know when the bull actually takes charge of the market, you could make money with that knowledge.