“It wasn’t raining when Noah built the ark.” -  Warren Buffett

Market Commentary:

• The market is losing its upside momentum. Lots of chairs are being removed as the music gets louder and faster. It is a great time to raise cash by harvesting some gains and selling losing positions.
• The number of new 52-week lows is increasing and is already raising the caution flags. The advance/decline line on Nasdaq is breaking down and we are now seeing more new lows than new highs on Nasdaq. A dangerous sign with the index recently hitting an all time high.
• High ranking Magnet and FACTS stocks are limited to several dozen in a pool of thousands of companies. Leadership is too narrow for comfort.
• Now is the time to create a buy list and be patient, and then try to buy 15-20% lower within a few months. 
• Pay extra attention to valuation. Beware of today’s red hot crowd favorites. Remember America On Line and Blockbuster Video.

Economic data and market clues: 

Retail sales and housing data will be watched for clues about the overall economy. The “haves” continue to spend while the less fortunate are hurting.

The housing unit shortage trumps any short-term noise that comes out of the data.

The stock market is very similar to the rest of the economy with many more losers than winners 

Make sure to cut losses if any portfolio holding fails to meet your intermediate expectations. Patience is good while averaging down in losers is bad behavior.

Current holdings:

Magnet®:

Novo Nordisk NVO

Celestica CLS

Mr. Cooper Group COOP

FACTS:

JP Morgan Chase JPM

Church & Dwight CHD

Marsh & McLennan MMC

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