Random Thoughts-Market Update
by Dave Landry
Sucking on the teat of the bull for the last 6 years (ew!), the buy and hold crown prevails. One of these days it’s going to end and it’s going to end badly. Don’t worry, I know that the road to ruin is paved with those who are “right but early.” I didn’t earn the title “Trend Following Moron” by fighting trends. And, we do now have more longs in the current portfolio than shorts (those longs are commodity related stocks, read further, my point is that I’m not afraid to buy stocks as long as they are going up—even if the market is questionable). Maybe the market is shaken but not stirred and it will die another day. I guess there’s no “maybe” about it. If it does go on to new highs, the bull riders will breathe a collective sigh of relief and go back to what they do best, nothing (vs. active management). They’ll think “we won’t get fooled again” (Who said that). Corrections are just that. Corrections. At some point, again, it will end badly. I’ve seen it. That’s one of the few things that I can actually guarantee. In the meantime, if it does go back to new highs and stays there, I’m back in. For now, I’m picking my spots carefully. I do like the fact that the Energies and Metals & Mining are offering opportunities since they can trade contra to the overall market.
So What Do We Do?
I don’t care about being right. I don’t care about being a hero. I only care about making money—and not losing money. An overbought retrace rally is a very dangerous time to buy stocks in general. You have to pick your spots carefully. Fortunately, the aforementioned commodity stocks which can trade contra to the overall market appear to have turned the corner. So, focus your energies there while digging for opportunities-I'm so darn punny! Above all, give yourself gift of time (here is the column that this market update was originally associated with).
May the trend be with you!
(your reply: and also with you Reverend Dave)
I'm deeply sorry to say......
I really hate to end on a low note but I’d be remiss if I didn’t mention that we lost a good one. My friend and fellow member of the American Association of Professional Technical Analysts Ian McAvity has passed. Ian had the incredible gift of making the boring subject of macro economics statistics not only entertaining but downright funny. He inspired me to do the same with the dry subject of technical trading. I’ve “stolen” a lot from him a lot over the years. I owe you big time my friend! I know he’s up there laughing at us down here still fighting it out and will be shaking his head with the SHTF. Goodbye my friend!
Here’s a classic Ian example of even when things seem great, they can change rather quickly: