Not Buying Today

At 2:30 p.m. CST, we have the markets all holding their gains and extending them with all the major averages up around 5% today.  Huge move on a percentage basis.  But, then you look at the charts and realize that we’re only back to levels of 3 days ago.  Wow!  I’m not doubting this rally at all but I didn’t buy anything today.  When I see General Electric & the financials as the leaders today, I’m suspicious.  Also, the volume kind of petered out at the end of the day.  The S&P SPDRS (SPY) have traded 330 million shares today.  The last few days we’ve been trading around 500 million.  The volume was strong in the morning but was weaker as the day went on.  With that said, we still have an oversold market, a 90% upside volume today, and a market getting stronger into the close.  So, I don’t doubt this will continue but I didn’t bite the first day, especially since the equities I own were up big today. 

As I’ve been mentioning on my radio show, small caps & materials are leading today and I think they will continue to lead if the rally continues.  Where do we go from here?  I’d prefer to see a weak pullback tomorrow.  Low volume and maybe down 100.  That would be a step in the right direction.  But, for today, it’s too big of a jump in one day.  But, it’s definitely nice to see some green.

If you are a 401-K investor that has been dying to get out or anybody that has too many stocks.  Please do me a favor and sell something today.  Yes, the rally can continue but don’t forget how you felt the past 3 months watching your net worth shrink.  If you’re holding a lot of cash, we’re looking to buy.  But, for those that can’t sleep at night because they still own too many stocks, sell something today.  Anything.

I’ll be on the Fox Business Network tomorrow morning at 8:10 a.m. CST & 8:30 a.m. CST.  Make sure you tune in.

This post published at www.karleggerss.com

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