Hey there Skane. An old face from the past. Indeed, SNRS has been a roller coaster ride for those who had the patience to see the whole process through. Some great perspective was gained from watching the VISX episode unfold too--a reminder that daily up-environments can easily reverse and turn into seemingly daily-down environments, something which this hyped-up tech market hasn't learned yet.
Don't get me wrong. I play this tech market too because it's the only game in town (well, biotech is a part of this party too), but my distaste for the current divergent environment has left me to increase my rate of trading. I have become more loath to hold stocks for longer time frames in this manic-depressive environment, and have recently started to actively search for short candidates. Instead of pure long positions, I am trying to simultaneously open hedged positions of both long and short.
Portfolio managers are running out of havens in this market. Outside of tech and biotech, other sectors have just lost their air. Looking at the Sector Spyders and the differences between current prices and their peaks(approximations):
- The Dow Diamonds are near correction territory, off 9.5%
- Basic Materials are near bear market terrritory, off 19.6%
- Energy off 13.8%
- Financials off like basic materials, 19.6%
- Consumer Staples off 20.5%
- Utilities off 15%
- Consumer services off 6.4%
Only tech is up, and even that is beginning to narrow, as evidenced by the relative outperformance of the Nasdaq 100 compared to the Nasdaq composite.
Last year, the average mutual fund beat the S&P 500, a rare feat, which tells me that everyone's playing the tech and communications sectors, because those are the only two sectors that significantly outperformed the S&P 500.
Trying to think of this strategically, from a short perspective, I see my "opponents" backing into two corners, with biotech perhaps being the last haven before we see a break. That's my current hypothesis, at least.
Note that my theories and expectations are subject to change at a whim, as I believe that an ever-shifting set of expectations is perhaps the best stance for success as a trader in this market.
Rainier |
