If you go back, way back to October 2009, right here in this humble blog, we suggested it would take two things to get us out of this mess. People working and stability in the housing industry. If you have been watching the employment figures, we are seeing a VERY gradual improvement. The 10th of a point here and 10th of point there are heading in the right direction. The promising automotive numbers this week imply we could see improvement in the auto industry hiring (And according to this mornings jobs report there was), and that has an impressive trickle down impact.

We are hearing early signs of slight improvement in the housing inventory numbers. (Admittedly the mortgage application numbers this week were icky, but some of the housing data are showing signs of life, embryonic life perhaps, but life none the same.) Then today we had a bustle of hope as Rumors of a White mortgage stimulus plan got everybody all a bother, only to find out if was low life blogger like me speaking enthusiastically. Bloomberg picked up the rumor (Ooooppppsss) and White House quickly quelled that notion. Too bad it sounded interesting. One trillion dollars in mortgage reduction to those who have agency backed (Fannie or Freddie) and have made their last three payments. They could all refinance to a 4.85% loan saving the average debtor 350 dollars a year. Some a lot more some a lot less.

It would be nice to say you just save American Homeowner's 1 trillion dollars over the next 10 years. Hey it might even get some votes. You don't think that maybe the White House is, nah that could be. They know we are already in debt to the tune of 14 trillion soon to be 16 trillion. They certainly would not add another trillion? Heck its only a 6% increase in debt. It's not that bad. And if you get to stay in office another four years, it might be worth it, don't ya think? Ah, but its just a rumor.

We added to our XOM and MSFT positions today. Cash makes up about 16% of our portfolio as we move back into the market cautiously. We were about 28% cash two weeks ago. Bonds still make up about 31%. XOM is our largest equity holding at the moment at 5.5%, followed by MSFT at 4.7%, followed by GWW at 4.3%, followed by CELG at 3.7%, followed by UNFI (This was piked using the MACD line and not the CANSLIM strategy for any of you checking that pick.) at 3.5%, and followed by NUAN at 3.4%.

I know that only adds up to about 88%. The balance are in some options I have not unraveled yet and MGRC one of our CANSLIM PICKS.

Early this (Thursday)morning we were looking for a bank stock with some hope and future and did not find anything to write home about. One caught my eye and came in at the bottom rung of acceptability of the IBD ranking. The bank is US Bancorp and is a financial services holding company, provides various banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The IBD ranking is an 80, our lowest we will consider so we put it on a watch list and did a little homework about 6:45 this morning. We really liked the chart. Between the fundamentals and the chart we liked ALMOST good enough to jump in. Instead, we bought some March 2012 26.00 call options. Now this is an option play, but it is based upon the CANSLIM system so our intent will be to execute the options and take possession of the equity in March. This is a way to ease into a stock on a hunch without tying up your capital. We bought the calls at 2.48 a contract. Thanks to the Obama rumor, they are up 8% today. We have stops in place a $2.25.

So now here we are Friday morning with a very positive jobs report and we saw futures opening up 70 points on the DOW, the market opens and kerblam, the market is off? There is no definitive explanation so I will suggest two that are being batted around the halls of Bloomberg. First the improving economy, yes it is improving, will strengthen the dollar and that will not be good for US business as our goods and services will cost more a broad so the overall market direction could move downward. The other drag is the assumption that if our economy continues to improve, the Fed will take off the table ANY consideration for more quantitative easing.

If the day continues as it is, look for another distribution day added to each of the major indexes. Not a good thing at the moment.

Salve Lucrum