- I want to start out today with "Market Thoughts."
Back in April, I sold off my high-beta stocks and rotated into some cash and low-beta (aka "safe") holdings due to a sell signal I had. My thoughts at the time were that in addition to the Black Box sell signal, we were headed into the weak summer season and mid-term election cycle stuff but that I'd look for weakness to play a summer rally. At the end of May, I had buy signals and put cash back to work, including some high-beta positions in early June. I mentioned that I thought we would likely see a summer trading range.
So why would I buy stocks when facing a potentially frustrating trading range? I thought the market looked right, and there was no guarantee that we'd see a trading range develop. We could've launched back up for good right then. I think it's better to be positioned for a rally even if the rally takes awhile to develop. (Just as I had sold in April using the same strategy in reverse). We are in the trading range, and what is happening is that this is serving to really frustrate the bulls. Folks are convinced more and more that we're in a bear market each time we come down near the bottom of the trading range. Yes, some sectors will overshoot (semis and tech), so I watch the SP500 as my main indicator of where we are.
Things are gloomy right now, and the SP500 isn't back at the trading range lows. North Korea. Israel and Palestinians. Iran. Iraq. Afghanistan. Oil prices. The Fed raising rates because they fear inflation because the economy is too strong. On and on. People are extremely bearish and getting more so with each trip down to the bottom of this trading range. Some are convinced it's a bear market, from listening to Gary Kaltbaum yesterday. I disagree. I think this is a pullback or correction like we normally see a few times a year, and that the bull market is still intact.
Just my opinion, and I remain long with beta.
- My former company, The Salt Mine, has called me about a job offer. As you know, I recently turned down an offer from Wonderful Inc. They left a message on my vmail, and said they'd call back. Interesting. The Salt Mine is much closer to my home than The Fun Factory where I work now. The job is in a different area than I worked before, but with the same manager. He's trying to build up a new team and gave me a call. Again, interesting.
- Ooh, as I type it looks like Haifa was hit by two missles. So we could see more selling and "giving up" on the market. I'll get more aggressive on that if it happens.