The market actually looks pretty good if you just look at the last run and recent pullback. It still has to plow its way past the recent peaks-aka resistance—to get to new highs. And, I hope it does finish its business. I have no regrets for being prudent. I know that at the least, I’ll live to Die Another Day.
To The Sectors
The aforementioned interest rate sensitive areas have begun to slide. Can the overall market shrug this off? Maybe, as long as not too many others begin to join in the fray.
Some areas like Foods, Defense, and Software have recently broken out to new highs but have begun to come right back in a “water’s fine, just kidding” manner.
Other areas such as Retail didn’t quite make it there (to new highs) before beginning to stall.
In the bad and the ugly departments, Transports, Drugs, Hardware, and a host of others still look dubious at best—stalling well short of their prior highs.
I want to be a bull but the market won’t let me just yet. You have to dig deep and not take the major indices for face value. If you don’t have the time to sift through several thousand stocks and hundreds of sectors each night-or can’t afford me to do it for you (I’m not cheap) then at the least, make sure you take a look at the broad based Rusty (IWM). It’s had an okay run recently but it still is well short of new highs. And, longer-term it hasn’t made much forward progress on a net net basis in a few years.
So What Do We Do?
Again, I have no regrets for being prudent nor should you. He who fights and runs away lives to fight another day-stop me if you’ve heard that before. It’s hard to be patient when market is in a “sort it out” phase but that’s the thing to do. You have to pick your spots very carefully. About all I’m seeing on the radar now is a few speculative IPOs. I’m going to nibble there on entries but for the most part, I’m going to be patient. Now’s not the time to start new projects.
Best of luck with your trading today!
*Thinking Fast And Slow, Daniel Kahneman. Click here to buy at Amazon (Big Dave approved).
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