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Slow Slow Grind Continues April 16, 2011

Posted by Tom in Thoughts.

The last couple of weeks have been hard on those of us who actively manage accounts.  Determining a trend, or a change of one, and following the “Smart Money” has not been easy in here.  I think the large pools of money are waiting for more companies to report 1st QTr. earnings, as everyone is afraid to be on the wrong side of a 1 cent ‘less than expected’ report.  My way of saying that there’s a lot of nervous investors out there, both pro and semi-pro.

Precious metals continue to do pretty well along with select commodities (gasoline, tin, cotton, coffee) and some emerging market countries are regaining a foot hold (Thailand, Indonesia, Australia, Chile).  Heck, even European countries are showing some signs (Germany, Switzerland).

As far as US industrial sectors are concerned, here’s a list of some showing strength:  tobacco, drugs (esp. biotech), diversified services, food & beverage, internet, chemicals, specialty retail, computer software, telecom and metals.

So, the slow grind higher continues, but there is plenty to be concerned about.  I think that concern shows itself in the relatively low volume that we’ve been witness too.  For now, I’m being very selective in what I buy and hold.  The old sage “this is a market of stocks, and not a stock market” is holding true, as some stocks are doing very well during this time of not much happening.  Small Cap stocks and funds have recovered and the “risk on” money has returned, but this is very hot money as well.  It can leave the market very quickly.

My research continues in applying tried & true selection strategies to some new software.  Unfortunately, the backtesting will take many weeks and will continue in some form for months.  (The problem is that the software does not have historical backtesting since it uses technical and fundamental data; there are work arounds, but one must be patient & careful.)

I remain invested in the areas of strength, but unusually cautious.  The market’s background strength is just not there . . . yet.  Press On and have a great week.


1. Tyson - April 19, 2011

Reached your blog through Stumbleupon. You know I will be signing up to your rss.

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