Short term caution

fuzzduzz

Member
imported post

This should be an interesting week. I have some pros and cons for the short term.

Pros: The leadership in the market recently has been small-mid caps, technology and transportation stocks. That is usually a good sign for the market when those sectors lead. The weak sectors of late have been healthcare and consumer staples considered defensive sectors.

This tells me that investors are gaining confidence in the market and are moving from defense to offense mode.

Earnings are expected to have double digit growth this quarter.

Cons: The market has been rallying since mid may possibly on the great earnings expectations. The old adage buy the rumor sell the news could possibly happen. This market could sell off on the good earnings annoucements.

Of course the Iraq handover could be positive or negative. Terrorist activity is increasing as we near june 30.

Interest rates on june 30. The market has priced in a 1/4 pt. increase already if we get 1/2 increase I'm not sure how the market would react.

Jobs # is comming out on friday. It usually can move the market quite a bit.

The Dow and S&P fell on increasing volume friday and closed near there lows even though the naz was up on good volume. Although the volume may have been skewed by the rebalancing of the Russell indexes.

There's alot of overhead resistance nearby on the upside. I'm not so sure the market has enough steam to plow through it without a healthy correction first.

A market that started looking good to me on tues. and weds didn't look so good on thurs. and friday. I think there maybe alittle upside left before we correct but I feel like I'm standing infront of a steamroller trying to pick up nickles. I don't mind missing the first 5-10% of a upside move or the first 5-10% of a downside move as long as I catch most of the 80% of the move in the middle. There's less risk once the trend has been established and trying to call tops and bottoms is a good way to have your head chopped off and handed to you on a silver platter.

The uncertainty and volitility like this usually happenes at tops and bottoms. I don't know yet if were at a top or a bottom? I'd rather err on the side of caution. I don't mind taking alot of risk with my personal accounts (roth and ama) but I don't do it with my retirement money.

All in all if we hold support levels this week and start back up I'll jump in. If we don't I'm in a good place now (100% G )

Good luck to all TSP'ers

In my humble opinion :)
 
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Ditto :u

Except when I go to mycautious place,I'll be a minimum60-70% stocks. I don't want to be caught with my pants down while we are on the cusp of the next leg up, even though the short term is still unclear.

Tom
 
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