Author: Mitch Jones
Covestor model: Price Momentum
Disclosures: Long DEER, GU, AVAV
The major indices were slightly down for the month of June, despite an amazing run up the last week of June. The Dow Jones (no relation) Industrial Average was up five days straight through end of day July 1. I can hear my three year old, Carter, cheering on the markets to climb higher in Spanish, “Sube, Sube, Sube!” Or maybe he is just engrossed in a Go Diego Go episode.
My investment model was up slightly for June. The best trade of the month was in Deer Consumer Products, Inc. (NASDAQ: DEER), riding the upward price momentum a week after a bounce from its 52-week low. Poor performing trades were in Gushan Environmental Energy Ltd (NYSE: GU) and AeroVironment, Inc. (NASDAQ: AVAV).
I think the markets are due to cool down as the recent short summer rally comes to an end. Expect more bad news from Europe – Greece has agreed to austerity measures in exchange for more bailout money, but it remains to be seen that this will prevent insolvency. Any default in Greece or other European countries will have a negative global effect on the market.
Commodity and energy prices are still high and consumer confidence remains very low. I foresee the overall market moving lower in the next month – I can already hear Carter exclaiming “Baja, Baja, Baja!”
The strategy of this investment model focuses on individual stocks with positive movement. My intention is to avoid correlation with the larger market, which can be especially beneficial in a downward market.
