Vibration….So Far

At midday, the Dow Jones is down about 150 points and we’re seeing moves down in materials, metals, & stocks.  On the plus side, the dollar & bonds.  Weaker consumer data yesterday and a much lower than expected confidence number today spooked the market and gave investors a reason to sell…for now.

But, you can see below that the S&P 500 is really in a range (yellow box) right now and hasn’t broken down.  For the past 10 trading sessions, the S&P 500 has been moving sideways hovering around 1000.

S&P 500

 

This is where you have to not get confused by the day to day noise (vibration).  The last several days have been all over the place with conflicting news reports about the economy.  But, slowing down your trading has been the best move.

You know where I stand on the economy.  I think the stock market hasn’t fully discounted the recovery.  That means when we get individual pieces of data that go against that, I view that as a buying opportunity.  In the last couple of days, everyone is questioning the recovery.  This comes off of last week where everyone was sounding like the recovery would last forever.  Neither one is correct.  We are recovering, slowly but surely.  Eventually (possibly several months from now), that recovery will end and we’ll end up in a stagnant economy.  But, we’re not there yet.

For now, I’m not selling my positions but rather looking at a sideways market and determining when will it break out to the upside.  As I stated in my last post, we could easily see a 4-6% pullback but I think the market is re-setting or re-loading with out REALLY going down.  It’s just gyrating.

Holding for now.

This post published at www.karleggerss.com

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