. . . . . . . . . . . . . . . . . . . . . A January Sell-off?. . . . . . . . . .
Well. . . here goes. . . .another crazy prediction. . . This has been a baffling market lately. . . nothing has made much sense to anyone lately.
All in all, I must say that this "straight up" market disturbs me more now than it did back in April. . . . and here is why. . . . when I am on the interstate, I have a habit of speeding up just before my exit. . . I don't know why I do it. . .but that is what we did in April. . . it made sense that we would have a summer selloff. . .so we RACED ahead in April. . . knowing the selloff was a few weeks away. . . .
However, January traditionally sees a huge influx of cash into equities, by corporations, institutions, mutual funds and individuals. So even if the market wanted to sell off, it cannot. . . .at least until later in the month. . .
So I am going to predict January to go as follows. . . January is a big earnings month. . . and I see it playing out exactly as April did. . .with those stocks expecting the best earnings to run up hard in FRONT of the earnings, then becoming the first to sell off on the earnings, regardless of the result.
The hope of strong earnings becomes the rumor and the actual earnings report becomes the news. . . [buy the rumor, sell the news]
By the middle of the month, I expect nearly all the high-tech stocks will be looking to selloff. . .similarly to April. . . . for those that don't remember, we were nearly completely out of tech stocks by April 15.
So I am predicting a mid-January selloff of tech stocks. Beginning Wednesday, January 13. . . I plan on being mostly out of high-tech positions by January 14, 2000. I will hold core positions long with no change through the winter.
I am out here on my limb again. . . . but this is the only thing that makes any sense to me. . . .and I must go with my instincts. Prior to this date. . . I suspect tech stocks will surge ahead WITHOUT many of those that have been counting on a December pullback.
I believe the selloff will last into the first week of February. . . which will be the time to find the tech bargains. . . . though the word bargain will be relative, because the lows then will be HIGHER than todays highs. . . .
This is not good news for traders. . . but is fine for investors.
Long-term, we are fine. . . but our trading strategy was flipped upside down. And that is due to the same "offensive strategy" against the individual investors. . . that turned October upside down. There was no October sell off. . .there was no December sell off. . . and the big January rally will end up being the start of the biggest sell-off of the season. "Gimme something. . . ANYTHING to throw off these increasingly savvy onine investors," the fat cats said.
As everybody and their brother moves into the markets in January. . .beware the carpet being pulled out from under us!!
Urge caution to blind newbies in the first 2 weeks of January!
I will be focusing on the foreign tech stocks, small caps and telecoms over the next week. . .as both are part of an aggressive trading strategy, as well as a defensive investment plan.
Rande Is |
