We Were Due, Right?

We were due, maybe overdue, for a market correction. $$

We just had the Biggest weekly decline in three months.

Yet, the market held up okay towards the end of the week. We reversed the slide on Thursday, and Friday saw decent gains. Granted, Friday was options expiration. But we saw the NDX lead, and that's usually a good thing.

The week ahead will be interesting. The Middle East continues to flare up. Unions are battling the Wisconsin governor. Apple has a news event scheduled on the 2nd. The Federal government may shut down.

An there will be a new #1 team in college hoops, as Duke just lost to VA Tech.

Additionally, it's the beginning of March. The beginning of the month usually sees inflows of 401k dollars.

Stay tuned...
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At the local Indian casino. Very crowded. No sign of recession here.

Stocks in the Year of the Rabbit

The Super Bowl is over, so let's take a look at the market as we race into the Year of the Rabbit.

Ooh lah lah.

The monthly strength period winds down as the paycheck money has been dollar-cost averaged into the stock market. Earnings season is still in play, but winding down a bit as many of the big names have reported. Oil prices are rising due to a rebounding economy domestically and internationally. Oh, and Egypt continues to be in the headlines as protestors continue to protest.

And I didn't even bring up the Glee special after the Super Bowl. (That's on as I type, and the Glee cast are all dressed up as monsters singing the Thriller song. Or some version of it).

February tends to be one of the weaker months of the year. Or, as I like to say, the tenth best month of the year on average.

This is where it may get a little interesting.

The bull trend is going strong, even though sentiment continues to be too bullish. But sentiment does that sometimes, and it can last longer than anyone thinks it's possible. At some point it will matter, but who's to say when that will be?

I reduced my beta in January but continue to be mostly long with a little cash.

A little less cash after the Steelers loss. Hey, I was moving on, right? On to the NBA and don't the pitchers and catchers report in MLB soon?

The Monthly Strength Pattern $$

CNBC mentioned how strong the first trading day of the month has been recently. It's been up six months in a row and thirteen of the last fifteen. It looks to tack on another win today.

I read somewhere that for the past year or so, all of the market gains could have been had by investing only on the first of the month, and being out of the market the rest of the month.

Norm Fosback identified the monthly strength period and holiday trading patterns. I wrote about the Seasonal Timing System trading patterns at the link.

As the saying goes, "You can learn a lot from history."