Market Hits 1100!

Market Beating Foresight: Fresh New Highs Before Ending Flat

The broad market hit a fresh new high early before ending the week flat. The S&P broke through the 1100 level but finished the week slightly off those highs. Not a bad showing in light of a slow week in terms of market moving news. Third quarter earnings season is now mostly over. This week retailers were in the news with most reporting earnings that met or exceeded expectations. Dell was a disappointment which may have fanned the selling pressure late in the week. It was also a light week on news from the economic front. An influential banking analyst recently came out suggesting they were as bearish as they have been in a long time and that we would experience a double dip recession next year. Surely the strong market advance since March is fueling much of the bearish sentiment, but the market has also shown resiliency. We still view the 1100 level on the S&P as a very significant resistant level. If the market can hold this level near term, we plan to become more aggressive with our call option trading. As for stocks, we plan to stay mostly fully invested, but also do not have as great an urgency to replace stocks that have been sold. In other words, we will be more selective on the stocks we do buy, even if that means we sit on cash a little longer.

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services), Telenor (TELNY, Telecommunications), Conseco (CNO, Insurance), and Bucyrus International (BUCY, Const. & Agric. Machinery). We added two new stocks to our watch list including Paragon Shipping (PRGN, Water Transportation) and Patriot Coal (PCX, Coal). Paragon is a stock that was severely beaten down over the past two years but has been making a recovery over the past six months. On a valuation basis the stock is really cheap, but the near term economic outlook still pressures company prospects. However, the company is well positioned long term and continues to expand its long term contracts. Once shipping volumes begin to grow, Paragon should do very well. Patriot Coal was also newly added to our watch list, a company that has been on our list before. Patriot is not in a flashy industry, but its stock has done very well over the past year despite what should have been a difficult year. The company is very attractively valued with a stock price that continues to move up steadily. Patriot Coal stock does show volatility, so patient investors may get the best price when buying on dips. We have dropped Kapstone Paper due to increased levels of volatility that have pressured the stock price downward, a little too sharply for us. Overall we still like this market and would encourage investors to continue buying on dips. The stock market will likely remain very bumpy, particularly until the market can demonstrate strong resistence at the 1100 level on the S&P.

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com