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The Dow is Not Done

The Dow managed to stay above 22,000 on Thursday after putting together its eighth straight positive close and seventh straight all-time high. But the other indices took a different path due mainly to a slump in the energy sector. 

A 0.04% gain may not be a lot, but it was enough to keep the Dow’s streak alive as it finished at 22,026.1. The S&P was off by 0.22% to 2472.2 while the NASDAQ dipped 0.35% to 6340.3. In addition to the latest round of earnings, the market also had to deal with a softer-than-expected ISM Services report. The reading of 53.9 is still solidly in expansion territory, but was down from last month’s 57.4. 

“This was a bit of a surprise. But the report was quick to note that ‘strength is still the clear message’ as inventories continue to rise, delivery times are slowing, and as the report emphasizes, backlog orders are still rising as well. All bullish signs,” said Kevin in Options Trader

Of course, the big event of this busy week is tomorrow’s Government Employment Situation report, which is expected to show about 175,000 jobs being added. We’ll also have to watch and see if news of a grand jury in the Russia probe will have any impact, as the market has been largely ignoring politics for a while. 

The Insider Trader was the busiest portfolio on Thursday with Tracey selling one name for a double digit profit and adding two new stocks. Meanwhile, Surprise Trader cashed in another piece of its Netflix position for a nice return. Learn more below: 

Today's Portfolio Highlights: 

Insider Trader: Tracey plans to add “a lot of new blood” to the portfolio over the next month, and she started today by selling one stock for a double-digit return and buying two more. Here are the moves: 

• Flagstar (FBC): Shares of this Michigan bank jumped after a great earnings report last week, but the editor is skeptical of seeing further upside since the Fed is likely to stay on the sidelines for a while. She thought this was a good time to sell FBC and take an 11.2% profit. 

• Raytheon (RTN): Only one director has bought shares recently, but that’s actually A LOT of activity for a large-cap defense firm like RTN. Plus, the insider is also buying while the stock is at a new high, which is another bullish signal. 

• E*Trade (ETFC): With stocks hitting new highs, this online broker is seeing more accounts and stronger results. Like RTN, only one director has bought recently, but this was another rare buy for a stock trading around new highs. 

Tracey is giving RTN and ETFC a 10% allocation each. The portfolio is now back up to 100% invested, but remember that she plans to make new moves in the coming weeks. Read the full write-up for more specifics on today’s activity. 

Surprise Trader: Eric is squeezing all he can out of Netflix (NFLX). With shares sluggish again on Thursday, the editor sold half of the remaining shares (or a third of the original position) for a profit of 10.4%. You may remember that he sold the first third back on July 18 for an 11.1% return, which was a day after NFLX became the first big star of this strong earnings season with an impressive quarterly performance. He’ll hold onto the final third to see what happens from here. 

Reitmeister Trading Alert: "No my friends, the bull market is not over. However, this does increase the odds that we press pause for a while for these situations to clear up. The question is whether that is before or after we hit 2500 which is still just a short stone’s throw away.  

"Let’s keep a close eye on the situation and trade accordingly. But let me tell you why it may not be so negative. ISM Service internals were not as bad as the headline read of 53.9. New Orders and Backlog of Orders are still quite positive. And have a feeling this is a one month blip.  

"As for the Russia probe…I admit that if this thing picks up speed and seriousness, then it could have damaging effects for the market. So I will keep DC on my radar more than usual so we don’t get caught by surprise.  

"We are going to stay nimble for this moment. Let’s give the market a chance to break to 2500 before taking money off the table." -- Steve Reitmeister 

Have a Great Evening,
Jim Giaquinto

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