[ Market Thoughts ]
The market stinks. Market momentum has continued to deteriorate, but is approaching the 89 day moving average support, which is around 1077 for the S&P 500. The market is about to get a health checkup, and a bounce (or a lack of) from this level might be indicative of where this market is headed in the near term.
Many sectors are also exhibiting weakness. That includes the small cap group in particular. The higher quality issues are the ones that are showing the most resiliency, but after even these weaken, what's next?
Weakening momentum signals from my indicators told me to considerably reduce my exposure to the market sometime last month. LU, as expected, has stayed slightly weak to flat, making the covered call writing strategy particularly beneficial for longer term holders, since time works in the call writer's favor.
I'm just sitting in cash, looking for the next surgical strike. As of the past few days, SUNW and EK have interested me when it comes to the larger cap issues. SUNW, however, is failing to follow through on its upward moves, perhaps cautioning me that the markets, particularly the tech sector, are looking to take profits on any sign of near term upward momentum.
For now, Cash is King until these headwinds blow past the US markets.
Regards,
Rainier |
