Mattie,
>>>What would it take for you to change your mind - that the market is heading higher?
Define bullishness and how much higher. Wall Street Week defines bullishness as when you expect more than 5% rise in indices. +/- 5% is neutral. Below 5% is bearish.
It is too late to be bullish for me, based on valuation and choppy action. I was there two months ago. I was even there last month, after the rate cut. Since then, indices have already made new highs and have been struggling in the last few weeks.
Let me ask you. How much higher do you think these indices are going this year?
Ask yourself, why stocks are struggling. Why has volume dropped? Why has breadth disappeared? Why has volatility increased? Why has intraday pattern turned so choppy?
Should I become thrilled when analysts start upgrading stocks up here? Didn't MER downgraded NOKA on Oct. 8th, on the day we bottomed? Should we have sold our stocks then? Should I be excited to see BRCM up 17 points on no news that I could find?
Also, do the bottom-up analysis on the DOW stocks, look at their individual charts, and tell us how much higher these stocks can go? People talk about DOW 10K as if they are talking about taking MALL and NAVR up 20 points each. Shouldn't there be some justification for these big caps to go higher?
When MSFT goes up by six points and its market cap by $15B on negative MF, I really start scratching my head. Something is wrong when that happens.
For me to turn bullish, I need to study earnings history of the 30 DOW stocks and build up some confidence that the ones that are near or within 10-15% their 52-wk highs(leaders) could show evidence of sustaining growth in the coming months. Some good earnings and rosy forecast that could somewhat justify their existing high PEs is also greatly appreciated! The ones near their 52-wk lows don't bother me because I think that they are washed out and are non-contributors.
Same argument with respect to the big-cap tech stocks.
It is choppy for a reason. We are fully-valued and even over-valued up here.
Should we trade in and out of stocks if we think we can make money and handle this volatility? Sure. Do it. Go for it. But don't do it because you are bullish on stocks. Day traders don't. That's why there is money to go back into stocks every morning. It is not fresh money. It is the same moeny that was in the stocks today and jumped out with 1/8, 3/4, 4, 10 gain or loss..............Just don't forget to take profit because there are many hurting for having bot MALL at 40, SPYG at 32.........
Here is what I suggest to you. Instead of turning your energy and mine into this bear/bull discussion, try to identify fast-moving stocks and post them here. Goes true for others.
Take care;
Clint |
