Here we are sitting @ 1691.42 which we were roughly the same place in 2nd week of May 2013.......
BUT technicians are in "major panic mode predicting a big reversal"
I monitor many technicians analysis every week & they are all in agreement that "we are in troubled waters"
One doomster is predicting a crash like 1987.....where in one day we dropped 26%....
Another technician is predicting S&P 500 @ 1500...a 12.26% drop from 1709.67
SO...we have a scenario of 12.26% drop to 26% drop........
As history is proving that most technicians lose it @ some stage of any bull run........
We all know about past "geniuses" like Granville, Prechter...who were all good technicians but lost their magic wand many many decades ago......
Is Carter Worth facing similar fate??????
I am taking this bull market as "among the-most powerful & sustained in history of stock market"
YES there may be pause along the way like testing 50 DMA but comes back roaring to make new highs.....
ARE we @ this juncture of testing 50 DMA which is sitting @ 1652.36.......MAYBE
IF we test 50 DMA....it means we have another 39.06 points to go or another 2.31%......??????
IF we cannot stand a corrective phase of total 3.37% from absolute high of 1709.67....then we are in the wrong investment vehicle....there is money market for those........
IF my worse case scenario holds out....then it IS another buying opportunity for those who are under-invested or sitting on sidelines........
Please ignore "fear mongering headlines" & focus on what you should be selling & what you should be buying.......
I am completely out of technology.....as it has shown weakness in SOX & other areas...SOX is a leading indicator of tech health..do NOT ignore that.
Material & Precious metals are the place to be, an overweight is highly recommended.
Until October when general market MAY BE correcting.......new sectors will make serious gains......
SO..relax & look objectively @ market opportunities.......
BLOG does NOT give buy or sell.
Saleem
11 comments:
Hey Saleem,
I don't know how people can predict a 20% crash with a straight face and put their careers on the line. The standard reasons of sluggish economy and questionable earnings growth we've heard for four years and we know what that's gotten people. The new one is the taper and how without the Fed pumping the market is ready to crash. They fail to recognize that the Fed is only going to taper when the economy is ready on its own, whether that is September or later.
The only real reason I could see for a temporary large decline would be a result of Congress and their looming debt talks, although none of these technicians even mention that one. We could see rhetoric start to step up in September regarding that, and I wonder how the market will discount it given we always get acceptable resolution in the end. Anyone who has sold into the depths of the fear has been proven wrong again and again.
Stocktrader
Hi Stocktrader,
YES..fear mongering is the-focus now...this MAY create "volatility"
Minor correction is healthy.....as gurus will proclaim they are right about market negativity....BUT their celebration may last few days as TAPE makes a U TURN......
Saleem
Hey Saleem,
I've very tempted to take CLF off here. Of all the companies I own in the materials space (FCX/TCK/X/CLF), CLF actually had the worst conference call (much better than WLT though). I consider FCX and X better values here by far as iron ore remains heavily oversupplied into next year while copper and steel are less so. There's probably even a case for AA even though I don't follow them.
Stocktrader
Hi Stocktrader,
Booking profit is a good idea.
Many material stocks are lagging CLF...thus more upside for them.
Saleem
Hey Saleem,
Sold MODN @ 20.815 to take a wait-and-see approach on sales transition.
Sold WLH @ 22.58 avg based on terrible price action on such a good report. I think people might be figuring peak pricing power for the homebuilders right now.
Stocktrader
Hi Stocktrader,
Yes builders are out of favor based on higher 30 yr rate.......
Pruning non-performing stocks is a wise approach.
Saleem
Hey Saleem,
I keep staring at POT and MOS but can't seem to put together a full thesis with good upside. I know that the desperately low price prognostications are probably wrong, but even at $350/mt, where does the earnings power sit and where does possible upside come from? I know that with crashing potash prices, it severly limits the new supply that will come on, and potentially shut down some current operations, but I'm just not expert enough to factor all this into a valuation call.
Stocktrader
Hi Stocktrader,
You do not have to be an expert to know the uncertainty which surrounds Potash.....
No material gain can be had IF there is "downward pressure" on Potash prices.....
POT CEO was "full of Salesmanship" in his reply to current issues.....
Bottom line is "There is a problem in potash land"
Saleem
Hey Saleem,
Bought BAC @ 14.46. I've been waiting on these financials for a while and I think now is the time. I think long yields are inevitably moving higher along with economic growth, and that should bode well for a huge domestic bank like BAC. I was considering C and PRU also, but like the discount to book at BAC and have most faith in domestic lending.
Stocktrader
Hey Saleem,
Bought AA @ 8.24. I like these challenged industries where no new capacity is coming on because its been so crowded for so long. That gives good pricing power when things improve because the build cycle is so long. AA is leveraged quite a bit towards Europe which is finally coming along, and is exposed to some key bullish areas like aerospace, construction, and transportation.
Stocktrader
Hi Stocktrader,
Good logical moves in BAC & AA.....
It has been so long for AA...that finally after decades it may have torque......
Saleem
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