The market feels quite heavy, but you probably don't need me to tell you that. There are a lot of people that remain bullish through this. In spelling out the bullish case people refer to various data points, indicators and other tells that say the market should go higher.
I think we have a ways to go before the fundamentals lead to a rally. That probably means more sideways trading. One thing that I don't hear very often is the thing that seems most logical based on other recent time periods (like last year). If we have a rally I think it will be for no reason at all. In that scenario a rally would catch a lot of people flat footed with how quickly it happens.
The point of this post is if you are feeling very bearish to not too carried away with how defensive you get. I had an email from one reader who mentioned that he was 95% in cash. Chances are that person will miss a move up, when it comes.
Or maybe not but I just would be very careful with very extreme portfolio allocations.
I had some great comments and questions over night. I have to drive to Phoenix today. I will post later in the morning to answer the questions. Thanks.
Wikinvest Wire
1 comments:
"I had an email from one reader who mentioned that he was 95% in cash. "
That is not necessarily a bad thing - it depends on what he was in BEFORE he went to cash, as he may have been allocated heavy in something like topping energy's.
Most people forget that having no position in the market is actually a position. If you are unclear of where you should be, there is nothing wrong with sitting on the sidelines for a bit. Like not asking for directions, most people are unwilling to admit when they just don't know.
The way the market has been chopping around with huge volatility, there is no shame in stepping back a bit.
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