Wednesday, October 10, 2012

Market Thoughts

$$ - Market thoughts: We all called "sell in May" dead. I felt it, too. As the Summer went on and the market rallied off the late Spring lows, it seemed like the typical seasonal pattern had failed. The market shook off the Euro crisis and sluggish US economic data to rally to 5-year highs. Apple surged over $700 on the iPhone 5 launch. 

Now it is mid-October and those fears are back and the market has pulled back a bit. The IMF warned about slowing global growth. Greeks are rioting in the streets. 3rd-quarter US stock earnings are projected to be lousy. Even the US jobs numbers are questioned as part-time jobs surge and labor participation rate falls. Meanwhile, a bad Apple maps app gets the blame for an Apple correction that had the stock fall 10%.

I remain with some cash on the sidelines and in low-beta holdings. As I said in past weeks, believing that sell in May had ended, I would give it through October to see what happened. If the market remained flat or up, I'd end up dollar cost averaging in. If the market fell apart, I'd get more aggressive. It looks like we're pulling back and with the market at oversold levels, I'm thinking about getting the portfolio back to a beta on par with the SP500 - if not more.

This is just a few days after the market hitting 5-year highs!


Anyway, check out the RSI(2). See?

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