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All Clear Ahead ? February 12, 2011

Posted by Tom in Thoughts.

Well, that was a short blip down.  (OK, I admit it, I took a week off in Florida, so I’m catching up.)

The correction that was widely expected only lasted a couple of days; perhaps driven by the Egypt news and it’s related uncertainty.  This turned out to be a “shake out” and not a “breakout” to the down side.  Once again, buying the dips in this market has been rewarded.

Is the All Clear sounded?  Well for now, Yes.  But we’re still not without issues to deal with.  Here are a few:

* Volume is generally low: buyers are not in a hurry to buy more; this market is selective.

* Market Internals are OK: not overly bad or good, so there are not a lot of clues for anything coming up.  We’ll call it neutral.

* Prices:  generally Bullish; most markets are pushing higher in a steady march.  The most strength seems to be in the Large Cap. stocks, Small is bring up the rear and Emerging Markets are weaker (a sign of change ?).

* General Outlook:  There is a fair amount of complacency in the market.  The VIX indicator (showing option activity) shows more Bullish positions than Bearish being taken.

In summary, prices continue to gain ground, but not in a robust way.  So we follow the trend but keep an eye out for trouble.  My feeling is this market is subtile to bad news, Egypt taught us that.  Good thing it had a happy ending.

Have a good week !                  (as always, comments are welcome, just click Add Comment at the top of this post.)


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