At 2pm ET each Wednesday, including today, be sure to join me for this week’s Live Q&A Chat at https://twc.scutify.com/members/ or on the Trading With Cody app.

I think there’s validity to “Is the so called chase for performance at the end of difficult year” line that we’re hearing repeated now on TV and other places. At least for now, at this particular time and place in the markets. I wrote about this about it back in October when the markets were quite a bit lower than now, but it still holds true:

“The markets have had a nearly 5% straight up move since the most recent bottom was put in last Friday morning. On the one hand, there’s that old saying that has some merit that “The biggest rallies happen in bear markets.” On the other hand, that Friday bottom is a higher low that the chartists will have to respect. I still think there’s a lot of money managers out there who are underexposed to the markets and were worried we could get a 2008-like meltdown but are now starting to cover/buy more stocks as the market runs away from them. Certainly there’s a possibility that we drop back to the August lows, but feet to fire, I think the path of least resistance for the stock market is higher into year end.” 

Cody back in real-time. I want to do a little more trimming of some recent winners today and remain flexible as I dig for a few new must-own names.

$AMAT has been on fire since we took advantage of late summer’s panicky selling the broader stock markets when they were trashing semiconductors and other tech sectors giving us a chance to buy more of existing longs and add a few ones like $AMAT and $SIMOthat have rallied strongly. When I bought $AMAT back near $13 I wrote at the the time: “I recently put a toe in the water in this company that supplies giant equipment to the semiconductor factories at Samsung, Intel and other such fab companies. With $2 billion net cash on the balance sheet giving this an enterprise value of less than 10x next year’s earnings estimates, this stock could have a lot of upside in it over the next two to three years if the semiconductor spending cycle can stay steady along with the broader economy.” I do still think that the stock has some upside from here, but as a matter of discipline and following the playbook, I’m going to go ahead and trim about 1/8th of my Applied Materials position today.

I don’t see any particular news or other catalyst for today’s 3% pop in $NFLX, but I usually try to look past 1 day stock price movements anyway. But as a subscriber in the Trading With Cody Chat Room noted: “$NFLX‘s big move today is a continuation of about a 30% increase since mid October.” Indeed, as a matter of discipline, it’s probably time to trim a little bit of Netflix. So I’m going to let go of about 1/8th of my Netflix here today too.

Remember how painful it was to see most any stock crushed back in August on new real catalyst or news? That can happen again. And we want to follow our playbook of tranching in when they crash ’em and trimming down when the chase them.