Analysis: MS VMC VZ

After you receive this Alert, we will sell 500 shares of Morgan Stanley (MS) at or near $90.50. Following the trade, MS will represent roughly 1.27% of the portfolio.

On last week's September Members-Only call, we shared that if MS shares approached the $91-$92 level we would look to trim back the portfolio's exposure given the continued softness in the IPO market. With this trade, we are following through on that expectation, and should MS shares push higher to that $91-$92 level, which has significant resistance, we would look to cull the position size back even further.

While we've enjoyed the sharp move higher in the market over the last several days, we are quickly approaching an overbought level and that is leading us to add the proceeds from today's trade to the portfolio's cash position. That said, we are looking to add to our exiting positions in Vulcan Materials (VMC) , Verizon (VZ) , and others should the market pull back emerge in the coming days.

We have a lot of new data coming at us this week, which we discussed here, some of which could lead to expectations being reset once again. We also continue to see more downside risk than upside surprises with earnings expectations. yet another reason to be cautious in the near-term but keep our shopping list nearby.