Weekly Recap

Finally, it looks like some light at the end of the tunnel (and it may not be an oncoming train). Yes, the market lost ground this week, but Wednesday felt like a bottom. For the 1st time during this correction, the market experienced real fear on Wednesday. The pain has been there, but the fear has been lacking.

Today's short session proves nothing so I will couch any optimism with the need for the bulls to really step in early next week and take back the field. Only then will we know if the bottom is in.

Regardless, a lot of stocks are now broken and it will take a few weeks for leaders to regain the beginning of an upward trend again. Next week will say a lot about whether the market finishes strong and positive for the year or not.

This week has been highlighted by a very speculative purchase I made on Tuesday afternoon - ETrade (ETFC). Seeing that the stock had tested its bottom and held and understanding how oversold the stock was on legitimate credit concerns, I dumped in a bid that was taken at $3.80. Analysts have valued ETrade's brokerage accounts at $10 per share (more than $4 billion), so the mortgage-backed securities make up the delta between what the market is pricing in and the value of its core business. The negative value that the market is pricing in for the company's impaired assets is about liquidity concerns and the need for a potential mark-to-market write down of more than $1 billion. I am up 38% on this trade over two sessions. I plan to start peeling some profits off the position above $6.00.

AAPL also held its own and looks poised to recover nicely. GRMN, while down, is showing a nice looking bull flag. ROCM is lower and and the price action is worrisome, but that should be expected with thinly traded stocks. Finally, PCP also had a better second half to the week.

I made very few trades this week. Trying to guess the trend on the short term charts is not my style so I just need to be patient and wait for opportunities.