This market has been a "huge disappointment" all year.
Trend was uncomfortably negative all year.....
We are sitting @ negative return in all indices...
There is plenty of blame to go around for negative return as listed below :
-Europe debt crisis & lack of resolution.
-US political gridlock
-Chinese slowdown
-India slowdown
-European economies in recession
Based on most experts, who know European debt crisis, they expect continuation of that until 2013.
US political gridlock to continue until election.
Chinese slowdown to continue in 2012
Indian slowdown to continue in 2012.
Europe recession in full swing in 2012.
So, all of the above does not bode well for first half of 2012.
Based on recent past, current pattern of narrow trading range to continue into first half of 2012.
In S&P 500, range has been established between 1120 to 1270, currently we are @ 1219.66....
Now, we are entering last 5 trading days before holiday's. I do not expect much in the week of Dec 26th........
Most Hedge Funds have realized that, next six months, stock markets will remain in doldrums. HFT are resigned to playing it safe with 2% return in Fixed income with "no risk".
Market verdict on European agreement, Fed statement has been negative. Year end buying has been missing so far. New allocation for 2012 may not happen until later half.
Nasdaq is the-weakest amongst all indices, which could be the result of economic weakness worldwide. Nasdaq is well below 50 & 200 DMA.
Dow is the-best behaving, it is above 50 & got above 200 DMA on Friday, but closed below 200. Drugs & other sectors are contributing to its strength.
There has been extended period where markets went nowhere fast.
I sat through one period when Dow went from 1020 in Dec 1972 to Nov 1974 Dow went to 618.66, then slowly it worked its way UP to Aug 1982 to find a bottom......then broke even in 1982 after 10 years....Now Dow sits @ 11,866 after 29 years..a gain of 1200% in 29 years..annual return of 41.38%.
SO..IF you can "clearly see" long term potential of Dow from hereon with a sloppy six months ahead, then it may be worth the wait.....
I am not expecting much in next six months, same old news & same old TAPE....
Good luck with your OWN comfort level & market analysis.
BLOG does NOT give buy or sell.
Saleem
18 comments:
SALEEM
What a dour prediction for the 2012! I do not see it any other way either either..... China is slowing down--yup!
It has been one very tough trading year for me! Made a lot of mistakes. I do not know how bad I did over all --but not like 2010-at all...
Our politics are just terrible. We may be at a precipice--there is way to much hate/anger, and yes I am getting anger too..... I never used to get this way..
I do not like tax and spend policy! It hurts growth
Small Businesses , which are getting squeezed--big time
I will continue to hunker down may be more than before--until I can better see the market return an up swing bias.
I bought loads of GE and PFE. Drugs are hot.
I like MWE, and my copper play is SCCO.
the very best to all
Happy holidays to all!!!!!!!!!!!
C
SALEEM
Any thoughts on RIG
Way over sold and may be due for some come back?????
Hi C,
Do NOT worry about "what has happenned already"......but you CAN control how you do from here.
Every market is different, but we have to accept market verdict.
Saleem
Hi C,
RIG can be put as "speculative buy..almost @ March 09 level.
Saleem
SALEEM
thank you so much for taking the time to respond to my questions
thanks
C
MLP's esp OKS have been performing very well> I think this is an area one should look at
MLP's esp OKS have been performing very well> I think this is an area one should look at
Saleem
I really think you are right on this one, but I observed that when SP going into overbought condition, it will go down hard until it reach oversold, then it go back up until it reach overbought again. Guess we will stuck in this tight trend for awhile. Right now, we are approaching oversold condition on sp, so if you call this Santa rally or not, we will be up from here till second week of January. After that, I think we will see 1100 on sp. So my conclusion is unload everything the first week of Jan. and wait for oversold condition again. Good luck!!!!
C
Look like AMZN is set up to breakdown, I am thinking about getting some puts. If you like CMF stock, take a look at GRMN, it is breaking out
Hi Up,
This market has "traumatized" every trader, analysts, pundits,technicians & fundamentalist......
Just when you think, that market is headed UP..it goes down HARD...just when you think it is going DOWN...it goes UP.....
I am still trying to figure out a strategy to deal with uncertainty about direction......
Saleem
Saleem
This market never catch a break, those rating agency warn everyday regarding downgrade European credit. Can they just downgrade it and forget about all this BS. This is another example why retails like us are getting out of market.
Hi Up,
Rating agencies are working on their OWN agenda......are they in COLLUSSION with someone..always making comments 1 hr before close...its drip drip for weeks?
Saleem
SALEEM
LVS news
8:49 AM Las Vegas Sands (LVS) +3.4% premarket after announcing Hong Kong securities regulators decided not to take any action against its Sands China unit and has cleared it of one of several regulatory issues the company faces.
Hi C,
Thanks !!!
Saleem
Hey Saleem,
Bought some VMW this morning at $85.5971 with some spare cash in the account. There was a good analyst note this morning coupled with a short-term oversold chart. Maybe it can get some legs this week despite being one of those high-fliers that has seen big selling pressures?
Stocktrader
Hi Stocktrader,
VMW is showing "green" already.
good choice.
Saleem
Saleem,
Good morning! Thanks for your Sunday blog. It gave us the overall picture of the current world economy that we are facing. It is not encouraging.
Market has started with a normal routine, up then down. What should be our strategy in this market. Sell on the strength to build cash then buy on the weakness? I trust your strategy will not stay on the sideline. However, it is tough with the current unpredictable market. I am still high on exposure, so your guidance will be appreciated. Thanks.
Michael
Hi Michael,
Exposure needs to be maintained until you have profit in stocks...book profit & reduce exposure.....then repeat cycle...
See how i am positioned, some are bad some are good...idea is to make money with each position..some will be sooner..some will be later.....
Once i book profit my exposure will be reduced to 4 stocks....
Good luck with your strategy.
Saleem
Saleem,
Thanks for your response. That will be a good strategy going forward.
Michael
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