Middle East Turmoil Breaks Trend And Drives Market Lower!

The market reversed trend with a 1.7% weekly loss, the first in a month. Concerns over the Middle East turmoil took its toll as investors sold some profits and reduced risk. Egypt and now Libya have heightened concerns over Middle East stability and the obvious impact that could have on oil supply and prices. Energy companies have been the winners, while those companies heavily dependent on oil have suffered. It is interesting to note that Treasury prices rose significantly, clearly indicating a flight to safety amongst investors. The defensive posture that we now see is not surprising as we have been concerned over the possibility a small correction for a few weeks now. Volatility rose sharply, another sign of growing fear in the marketplace. The protection we purchased the prior week came just in time as those positions will help offset potential market losses. We think the market could struggle over the near term with sideways trading or a small correction, but lon ger term we remain bullish for the rest of this year. Now is not the time to run to cash, but taking some profits is practical and smart. Reinvest your cash over time to let the market work through the current fears and establish support levels. Last week we sold our Georesources stock for a 50% gain in just three short months. This oil and gas operator will likely move higher in coming weeks due to rising energy prices, but we wanted to take profits and avoid that urge to be greedy. We also recently purchased Raymond James and Corning, stocks that were added to our buy list the prior week. Both stocks lost ground as the market sold off, but we expect both to do very well over the coming six months. We plan to rotate out of a few more stocks over the next few weeks and will gradually reinvest our cash as the market stabilizes.

Momentum And Value (MAV Screen): Breakout Stocks To Buy!

What Stock Tips do we have? Our complete list of watch list stocks can be found through the link below. We have seven stocks on our watch list for purchase. Six of the seven are returning stars from the prior week. This week we are adding ConocoPhillips which closed on Friday at $77.28. Conoco is a large international energy company that will benefit from rising energy prices. Oil has already risen significantly, so there is risk that prices could fall sharply when the Middle East crisis abates. Investors should be careful not to get overexposed to the energy sector. However, Conoco trades at a very reasonable multiple, a PE of just 10 despite sales growth of 30% over the past 12 months. Earnings growth has been even more eye popping at 158%. Earnings growth like that is not sustainable long term, but that risk is mitigated with such a compelling valuation. Conoco gives investors an opportunity to play the near term panic in the Middle East, as well as provide long t erm growth potential. We bought two stocks last week and plan to pick up the pace with our investment purchases as the market stabilizes. If we do get a correction, we will buy aggressively to position ourselves for the anticipated rebound over the remainder of the year.

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