$NXPI - The Only Stock I'm Considering

Cash Is Still King

Historically, June is one of the 3 worst performing months for stocks.  With that said, I am conserving as much cash as possible and harvesting my profits right now.  I've lowered my expectations of the market so I plan to monitor things closely for the next few weeks.  Every stock (or option) trade I plan on taking this month will be low risk. My positions will also be smaller in size to help mitigate risk. 

Why I've Become So Bearish

Photograph by Ryan McGuire 

Performance in the transport sector is one of the indicators of the health of the US economy and it has dropped -8% in just the past 2 months. In Oct 2014, Dec 2014 and also Feb 2015, the market traded in a tight sideways fashion along the resistance before it corrected -4% to -8%.  This dip too only 5 to 7 sessions so things can turn on a dime! 

May basically traded sideways too and even strong stocks are getting lack luster volume with their breakouts. There are 2 sectors that historically perform well in the summer months - Healthcare (XLV) and Technology (XLK).  Using this historical performance as my guide gives me a better chance to pin point winners this coming week

$NXPI - The Only Stock I'm Considering 

There is only one stock that managed to make it to my watch list this week and that's $NXPI. Typically I track several stocks simultaneously so this really demonstrates that there is a lack of quality growth stocks in the current environment. I'll also make sure to use an option strategy to help minimize my risk in this trade. My profits will be lower but I'm fine with that in these conditions! I'll use a tight stop as well, just to be sure I'm covering myself properly.  

If you're like me, you won't hesitate to harvest a profit when you hit your goal.  You also won't hesitate to cut your losses if something goes south.

Happy Trading!