STOP In The Name Of Risk

In my reading over the weekend, I would suggest you keep a close eye on your orders as this could be a very volatile couple of weeks in the market.  Let's take a look at a few specifics for this week.

Monday 27 Aug

We have Germany starting out the week with a bad Business confidence survey.  Look for the market to open down (except the NASDAQ which will get a nice kick from AAPLs win in court over Samsung)  The market will finish the day down .5% on the S&P.

Tuesday 28 Aug

We have the Case-Shiller home price index.  Look for a drop from the firm May prices.  Anything below.4% will disappoint.  Our guess it will come in right in line at .4-.5%.

Keep an eye on the consumer confidence report.  A reading below 65.5 will disturb Mr. Market.  Look for a disturbed Mr. Market.

We also have a money supply report coming out of Europe before the opening.  Though only the pit bosses will be watching this one, it could tell just how much funny money the ECB has been printing?

Look for a flat opening and a gradual decline through out the day of maybe 1% with a quick turn around in the last 30 minutes of trading.  Another .5% down.

Wednesday 29 Aug

We have the GDP number reporting.  The Market will be looking for a quarter on quarter rate of 1.7%.  This is a goofy one to estimate how it might impact the market.  A downward move should be bad and cause the market to contract, however in these illogical times the bad news might fuel the happiness about getting more QE III which could make the market go up.  In other words, the bad news could be good news unless the good news is bad news then the bad news will be bad news if the good news is really good news.  Look for a surprise to the upside (our guess is 1.9%) and the market will be disappointed because Bernanke will have less ammo to print more money.

Canada should have a nice July industrial production report, but it won't be a market mover here.  This one is tough to call, but I am going for a downward move of 1% because of the positive GDP report.

Thursday 30 Aug

Personal income down, personal outlays up and prices creeping up.  All bad news and this could be where our house of cards start to crumble.  I am thinking a 2% drop because we will get bad news out of the Eurozone about business and consumer confidence, Germany's unemployment will spike, their retail sales will be lackluster (WSJ just did a good article about high end watch inventories backing up in Europe and in Australia.  The only folk buying them are high end traveling Chinese.), and Japan will have some decent retail numbers but they are off very low number from last years tradgedy.

Yes 2% down on Thursday.

Friday 31 Aug

It is a fairly quiet day on Friday at home.  Keep an eye on the factory orders.  Last week we had a soft durable goods order report which could telegraph a drop in factory orders except they don't back out aeropsoce numbers out of the factory orders like they do the durable good orders so this could come in better than expected.  That is my guess.  BUT, even if it does impress and we see decent  economic news out of Japan and Canda like good DGP numbers and household spending and manufacturing numbers, the market will be chewing on the polling umbers concerning the RNC meeting in Tampa and come to the realization that R and R can probably not take the Obama ticket.  Look for a full point down on Friday.

That would make for a week down about 4-4.5%.  That would be interesting.

I am trying to look beyond the noise of the Eurocrap, and the Election and the debt issues and buy value for my kids.  As a result, I will tell you my core holdings and the stops I am putting in place.

BRK/A                          $124,240

AAPL                           619.00

GOOG                          637.00

XOM                            83.25

CVX                             103.30

KO                               35.75

PG                               62.50

ABT                             60.25

BDX                             69.77

MSFT                          28.50

JNJ                               62.25

MCD                            83.50

INTC                           22.30

SYY                             27.25

BOFI                            21.00

GLD                             147.00