Rotation But No New Buying

In the last few days, we’ve seen a rotation from commodities and commodity stocks into the “regular stuff”.  Technology, healthcare, etc. have been doing fine.  I think this is only temporary though.  We haven’t been seeing any new money come into the market, just a rotation.  It looks like profit taking from the ag plays into other beaten up areas.  I suspect though we’ll begin to see that trade unwind over the next few days. 

Once again we saw a weak and tired looking market yesterday .  Downside volume was more than the upside volume and the overall volume was lower.I’ve writing that the market is just floating up.  It still appears the sellers are just pausing and waiting to short into higher levels.  The exceptions to this are energy service companies and the shippers.  Companies like EXM, DRYS, HAL, RIG, etc. are still doing just fine. 

I haven’t made any moves in the past few days but considering shorting more of the general market while at the same time buying more of the strong names.

Are Commodities A Bubble

The rationalization in 1999 for tech stocks going up forever seemed convincing just as the rationalization for housing stocks going up forever in 2005 seemed logical.  Now, we know the world is developing faster than ever and the shortage of food and commodities is real.  But, should the prices be going up this fast.  It’s too hard to tell.  I don’t think it matters.  I think it’s fine to participate as I am but always have an exit strategy to keep you safe.  You can invest in almost anything as long as you know why you bought it and what would make you sell it.  But for now, I’m still bullish.


2 Responses to “Rotation But No New Buying”

  1. 1 Stacy April 24, 2008 at 11:48 am

    thanks for this update. i was wondering if the bias had shifted and if it was time to get back into buying stocks on the next pull back; especially technology, it seems to be the buzz. however, I see prices pushing right up into supply and wondered if money was coming into the markets to blow past that area of resistance.
    i am trying to escape form the herd they seem to be running.

  2. 2 keggerss April 25, 2008 at 12:37 pm

    I don’t see anything to change my mind right now. Sorry to be the bearer of bad news. There are plenty of things to buy but still holding off looking to short into temporary strength. The herd looks to be wrong right now.

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