Friday was not a good day for the markets. With a half point increase in interest rates announced by the Fed the markets tanked. The NYSE (S&P 500) ended the day down 2.8% while the Nasdaq was off 2.6%. Both of these are huge one day drops.

Declining stocks out numbered the advancers by a 7 - 1 ratio on the S&P while the Nasdaq decliners held that ratio to 3 - 1.

All this negative action tipped the scales and turned our market classification to Red - Market in Correction.

We were previously concerned over the high level of institutional selling days which stood at 6 days for each index. As you will remember, we exit a market when this count reaches 7 days. When we fall into a Red market the institutional selling day counts are erased. We will start to count again when markets return to Green.

We now face a new challenge - market reentry. To reenter from a Red market we will need to see two things:

•  a convincing rally of 4 to 5 days where market indexes do not fall...

Our current portfolio is stalled in this Yellow market. Here's where we are:

• as of Thursday's close, we had only 5 active stocks remaining.
• the overall portfolio return was at -1.73%.
• we are at day 15.
• our portfolio return had been as low as -4.9% on day 9.
• the current market has cumulatively logged 5 institutional selling days for the S&P500 and 4 days for Nasdaq. These are moderately dangerous totals. For example - we always exit the market at 8 days and often at 7.

Given all of this, our strategy will be to liquidate our remaining stocks soon. We will do this by selling into market or stock advances. 

Once we've liquidated, we will sit on the sidelines until a Green market returns.

As always, please contact me with any questions.

Duncan Campbell

This morning Danaos Corp. (DAC) dropped through its downside stop and was sold at -12.5%. If you haven't already done so you should sell DAC asap.

Sell  DAC  $87.82  -12.5%

Please contact me with any questions.

Duncan Campbell

This morning as the market recovered, Amphastar Pharma (AMPH) broke through its upside stop and was sold +10%. If you have not already done so, you should sell AMPH as soon as possible.

Sell  AMPH  $39.60  +10%

Also note, that our traffic signal has turned to YELLOW meaning our market is now classified as Uptrend Under Pressure. While this requires no action right now, should we exit this portfolio we will not re-enter until the Market returns to GREEN.

Duncan Campbell

This morning semiconductor stocks dropped significantly and carried two of our stocks over the -12.5% stop loss threshold.

Both Monolithic Power (MPWR) and Advanced Micro Devices (AMD) broke through their downside stops and were sold. If you haven't already done so, you should follow suit.

Sell  MPWR  $422.01  -12.5%

Sell AMD  $103.06  -12.5%

Our portfolio is currently near its -4.5% sell point which will be an end of day decision.

Stay tuned.

 Duncan Campbell

Today, I sent out an alert recommending that as a defensive measure, a thinly traded stock (CMCL) be sold ASAP. Judging from the questions I got its apparent that some don't know how to handle the sale of thinly traded stocks. Below is a primer on thinly traded stocks and how to trade them.

Definition -  a stock that is said to be "thinly traded" is one where daily volume is not sufficient to ensure that at anytime the stock's bid and ask prices are close together. Further, if all the trading volume is occurring at the open or the close then a stock may be thinly traded midday. We usually consider 100,000 shares daily volume to be the lower limit of our volume range and a volume that should avoid thinly traded stock situations.

Market Orders - Since we try to limit our trading to higher volume stocks, normally market orders can be used safely to buy and sell our stocks. Where market orders become a problem is with thinly traded stocks. If you place a market sell order for a...

The current trading volume of Caledonia mining (CMCL) is too light to support our model.

We are recommending that CMCL be sold when investors can realize $15.00 a share or better.

Sell  CMCL  $15.00  +1.15%

This stock will not be replaced in the portfolio.

Please contact me with any questions.

Duncan Campbell

Below is our new portfolio final pricing from noon today.

Good luck and stay tunes.

Duncan Campbell

Below is our new portfolio with approximate pricing based on Thursday's close.

We will re-enter the market Friday noon.

As always we will distribute final pricing later Friday afternoon.

Good luck and stay tuned.

Duncan Campbell

This morning, after selling MP +10%, portfolio prices continued to rise.

The result was that the portfolio advanced beyond the +2.5% rule and was sold +2.78%.

If you haven't already done so, you should follow suite ASAP.

Sell Portfolio  +2.78%

We will begin the selection process for a new portfolio with a potential re-entry tomorrow (Friday) at noon.

Stay tuned.

Duncan Campbell