Patience on existing themes:

Patience on existing themes:

Rate sensitive themes remain at further downside risk particularly in the market correction. In addition, market psychology is picking up in regards to currency/liquidity. These growing fears persist after solid global stock performance in the past four years. Stock market declines is long anticipated and I am looking for further downside in the near-term while seeking discounted buy ideas. At this junction of the cycle, markets should see emergence of new themes.

Clearly, the sub-prime news is becoming accepted among media and general business observers.. (NEW- New Century). That said there are few short ideas on the table as discussed in previous weeks. And the bet is lower rather than a turnaround bargain attempt. Trimming exposure in those areas can protect portfolio performance.

Especially, not news for some who jumped on shorts early a year + ago.

Actionable Ideas:

Seeking shorts in housing, rate-sensitive, and REITS.

BKUNA – Bank United: Part of the real-estate short, with defined trading range. $26 resistance (exit level). Add closer to those levels. In addition, trim on strength on FED and ICE – (part of trading shorts).

In addressing, weakness in rate-sensitive area – In the next few days there is an opportunist task of finding additional shorts in REITS.

Liquidity is the engine.

Rising Yen/Carry trade: Issue has layers of matters and the general takeaway focuses on adjusting to days of rising yen. Therefore, transition periods cause concern for some and difficulty in adjustment for others. Regardless, the perception of “fear” can have a negative outlook and behavior on global markets. This is a major trigger of liquidity in the marketplace and a gauge which can generate additional noise. As for trend and macro impact – continue to sort out myth vs impact in the next few weeks.

Finally, looking ahead beyond pessimism and weakness in rate-sensitive themes. I comeback to my technology/media/communication groups. It is worth tracking the following powershare etf. Dynamic Networking Portfolio. I am not a big fan of solely owning etf’s for those willing to accept the challenge of stock picking. This group is an area of interest and the etf can offer positive returns by year end. In maximizing returns, will continue to seek opportunities among the names below.

PXQ - Dynamic Networking Portfolio

CTXS Citrix Systems Inc. 5.09% CSCO Cisco Systems Inc. 5.03% TLAB Tellabs Inc. 4.97% MFE McAfee Inc. 4.93% JNPR Juniper Networks Inc. 4.92% QCOM QUALCOMM Inc. 4.91% AV Avaya Inc. 4.87% FFIV F5 Networks Inc. 4.85% BRCD Brocade Communications Systems Inc. 3.32% HLIT Harmonic Inc. 3.31% SFNT SafeNet Inc. 3.03% WBSN Websense Inc. 2.89% WAVE Nextwave Wireless Inc. 2.81% CMTL Comtech Telecommunications Corp. 2.80% ADTN Adtran Inc. 2.76% ELX Emulex Corp. 2.73% TKLC Tekelec 2.70% NTGR NETGEAR Inc. 2.69% ADCT ADC Telecommunications Inc. 2.68% AMCC Applied Micro Circuits Corp. 2.68% QLGC QLogic Corp. 2.68% SCMR Sycamore Networks Inc. 2.66% SLAB Silicon Laboratories Inc. 2.66% DSPG DSP Group Inc. 2.65% SONS Sonus Networks Inc. 2.63% FDRY Foundry Networks Inc. 2.61% COMS 3Com Corp. 2.60% APKT Acme Packet Inc. 2.52% CCBL C-COR Inc. 2.52% ARRS Arris Group Inc. 2.51%