Thursday, January 09, 2014

Market Thoughts

Market thoughts: The market reversed again today, and then bounced.  The past few days a lot has happened, yet not a lot has happened.  The market seems to be moving sideways and rotating around.

Yes, they say everyone is bullish and yet everyone seems to be predicting that a big sell off is around the corner.  I’m not sure who is right – they all make sense.  After all, we are seeing some huge valuations and biotech “lottery ticket”stocks hitting big.  Revenues don’t matter these days.  Yet, you can’t go to a financial website and not see an article about a sell off coming soon

Emerging Markets continue to suck.  At some point it’s got to turn around.  Many folks are trying to bottom pick the EEM, but so far it just keeps selling.  Whoever gets that one right will look like a Wile E. Coyote.

As for me… I’m near 100% long in various leading stocks trying to be in the ones moving up and being careful about the ones moving down.  I’m not going to tout specific names, but I like leading stocks that are tightly consolidating around the 10dma or 50dma.  Most is in SPY, though.  But if things break down I’m out.

[I should have done this in 2013 as I was out of the market for many months and underperformed.  I’m blaming health issues (broken feet). I talked about it a lot on the blog and in the audioboos/podcasts, but just couldn’t do it.]

The Chinese and Russian stocks that seem to move around 7% on rumors or denial of rumors scare me. I’d love to guess right on some of these.  Check out some of the long candles on these kinds of names!

I’m not too concerned about the market moving sideways and frustrating some folks.  I’m hoping that the market is digesting the 2013 gains and consolidating by moving sideways in a tight pattern rather than some dramatic plunge.  I think the latter is very likely at some point, but hoping for sideways yawn as the 50dma catches up to the daily close.

But I do think the historic trend of a non-presidential election year correction is very likely this year.


Be right back with a “randomosity” post!

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