What I’m Seeing

It’s been a few days since my last post and not much has happened since then.  This market is like watching paint dry.  The market’s at the same place that it was on April 18th.  So, we’re coming up on a month with no real movement.  But, let’s look at what’s happened during this month. 

  • No doubt investors are much more confident now.  In a bull market, that’s a good thing.  In a bear market, that’s the kiss of death.  Which one are we in?  I’d still say we’re in a bear market.  What I’m seeing is that retail investors are becoming more confident at the same time floor traders and other professionals are becoming more cautious. 
  • The supply/demand picture is still negative and when we stand back and look at the market, we see that the increases since mid March have come from the sellers pausing, not tremendous new buying. 
  • Volume is still very low and the quality of that volume is not what we’d like to see.  Buyers and sellers are mainly watching from the sidelines.  This shouldn’t last for long.  One side will begin to prevail.
  • The advance/decline line has been moving sideways which shows that the advance hasn’t brought along a lot of stocks with it.  In other words, there are just as many stocks declining as advancing.  A lack of breadth is not healthy.
  • The economy has showed signs that perhaps later this summer, it will begin stabilizing or at least moving sideways.  Nothing to write home about and we’re probably in a recession.
  • Oil has gone up to $126 per barrel which can’t be good for an economy that is struggling.
  • Food prices continue to soar along with other commodities.
  • The presidential election is getting closer and that typically is good for stocks.

I’ve taken some profits and moved to more cash the past few days.  I’m continuing though to make purchases in areas with the most strength.  The dry bulk shippers are an example of this strength.

Sorry I’ve been sounding like a broken record but not much to report.  I’ll try to spend some more time posting on specifics rather than just broad market stuff for the short run until we see some actualy movement.

 

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KARL’S TWITTER (www.twitter.com/karleggerss)

  • Steady decline in the ADV/DEC all day on the #NYSE. 2 hours ago
  • Earlier this month, the odds of a December Fed hike were at 20%. Today, 63.8%. 1 day ago
  • Rate hike odds for rest of year according to Fed Funds futures: 11/1/2017: 2.8% 12/13/2017: 63.8% 1 day ago
  • Big beat by Philly Fed manufacturing index. 1 day ago
  • Initial jobless claims: 259k vs. 300k est. 1 day ago
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