Market Thoughts

Another fun-filled day in the market, with the market starting up early and reversing and trending down the rest of the day. The good news is that advancer led decliners, yet everyone seemingly remains pessimistic. Folks keep expecting a rotation into large caps, since small caps have outperformed in recent years. I'm diversified, but did increase beta in the last half of last week with some semiconductors and small caps.

While February tends to be weak and March tends to be strong, we haven't seen that play out this year. March often times sees a low and a strong rally. March often times sees a temporary top in the market, too. We are in an election year, and can't ignore the possibility of the typical 4-yr election swoon. However, with bearishness this high (as noted yesterday), it's hard to believe that those bears aren't already out of the market. The only thing they can do now to influence the market is to cover shorts or buy back in. I'd think...

AMD got shellacked today on rumors of a price war with Intel. Just an observation, but I can't imagine price wars are a good thing for the stocks involved.

Too early to tell if the monthly trend of options week strength will play out. If the week prior to options week is weak, then options week tends to be strong Last week was definitely lackluster. Sorry to keep bleating about "too many bears." It probably sounds old. My theory remains that the bears haven't been able to do much damage considering the pessimistic views shown in the Investors Intelligence survey. If this is all they have, then I think the market goes higher.