Christopher, all the points you raise are good ones, but the market is being driven by liquidity IMO. Valuations don't even come into play. Until the funds have reason to stop throwing their excess cash at the market, or until they start running low on cash, momentum strongly favors the upside. I wouldn't be surprised to see AMAT take off today on the notion that Asian problems were already built into expectations. I'm also not so sure this has been a stock pickers market, at least not recently. Almost everything has been going higher, and many major indexes are at or near new highs.
The best case I can make for a correction or even a respite is that the market is again acting like this is one big party. Check out CNBC or briefing.com (their track record has sucked for as long as I have read it). The threads on SI are getting euphoric as well.
For better or worse, I also have excess cash. And at this point, I would rather hold my cash than risk getting into the market at the top (so far, a big mistake). I have been gradually building a position in oil service stocks, particularly equipment mfgrs, deep water drillers and some service cos. Looks like they made a technical bottom a few weeks ago, and they are lagging the market now due in part to the depressed price of oil (which shouldn't hurt earnings but may constrain stock prices).
From your post, it looks like you are looking to buy once the market hits 8500. Is this because you expect a further break out from that point? |
