Dow at all time highs-what next !!

I am just back from a well earned break and the mkts have reached all time highs, with the Dow Jones above 13,000 for the first time in its history.We need to be ever vigilant here as it is quite possible for the marlets to continue higher from here and for a good while.

However if we retrace we could find a lot of profit taking and overshoot on the downside. I am still holding my protective puts from earlier in this year-they are underwater but they are insurance not a means to make money. I will continue to hold them and may even look to add a few more for further out months such as Aug-October.

I am also going to look to prune some of my positions and take the opportunity to protect some profits and indeed possibly take some money off the table and increase my cash holdings.The old adage of "Sell in May and Go away" is nearly upon us and it has been right more often than not, indeed last year I saw drops of around 10-12% in my portfolio around this time.

Menatime I am looking to add one or two new stocks with the potential for some big upside.These are more speculative and I would be careful re position sizing, I am not going to risk more than 1% of my equity on these.

The first one is American Drug Store retailer Rite Aid Corp (NYSE : RAD)

This stock has languished for years after reaching $50 a share in the 90's, I think they may be starting to get things right and we could see some swift gains if other agree. I am buying at current levels and am placing a stop at $4.95.

For those of you that trade UK shares I am looking at another couple of companies I am not ready to buy yet but they are :

Clapham House (LSE : CPH)

Finsbury Foods (LSE : FIF)

Charter (LSE (CHTR)

I will let you know when I am going to place some trades but it could be as early as tomorrow .

I will post an updated portoflio equity curve sometime this week.

Best Wishes

Alan

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