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Earnings: So Far, So Good April 22, 2011

Posted by Tom in Thoughts.
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First of all, Wishing you and your family a Happy Easter or Passover.  It’s Spring, and that brings renewal for the seasons ahead.  It’s time to think about where we want to be at the end of this year (and not wait until the end of the year).    🙂

Yes, this market keeps climbing the “wall of worry”.  Deficits (that have been there for years), Mid-East political turmoil, Japan’s heavy economic rebuilding costs and a sluggish domestic economy are all taken in stride.  So be it.  I went to a local investment club meeting last night, with a nationally known speaker.  During the Q&A period after the lecture, the questions from the audience were about why the market is going up (because it shouldn’t?) and predictions of the future.  No questions about how to analyse or understanding analysis, just “explain why to me”.  I was not surprised, but I was disappointed.  Richard Wyckoff once said that “the public only wants to know what stock to buy on Monday morning.”  So let’s take are look at this market and what’s happening now (“why” is beside the point; subject to change without notice).

Silver continues on its tear upward; since it’s basically a fear & greed trade at this point it scares me.  Precious metals go up quick, but come down even quicker.  I have a very modest position in silver and I’m always keeping an eye on the exit. 

The Pacific Rim countries are doing well.  Australia, Indonesia, S. Korea, Singapore, Thailand and others.  Retail and (of course) Oil and energy related activities.

I’m noticing slow but steady interest in Small Cap stocks.  Perhaps a move to put risk back on after our sharp mini-correction.  Earnings have generally been pretty good so far.  Apple single-handedly boosted tech stocks with very solid growth in earnings.  But still, there is nervous money out there.  We can see it with the brief sharp corrections that are news related; that’s not a health sign.  I remain invested in sectors and stocks that are showing solid relative strength, but I’m still alttle uneasy about it.

What I learned in California:  After +5 days in class and at a Technical Analyst convention, I’ve  brought back some new methods for stock and market analysis.  Some of these ideas are cutting edge, and have yet to be incorporated into my software (which should happen soon).  Since I’m a professional portfolio manager, and NOT a professional blogger, I haven’t incorporated graphics into this blog.  Once I have some “easy to understand” graphics, I’ll give it a try.  It should be fun & interesting, since I feel it sheds new light on the inner workings of the stock market.

Stay tuned.  It will get interesting.  (I’m always happy to receive comments; post them to me by clicking in the upper left corner of this posting, once you’ve logged in.  Go ahead, it doesn’t hurt.)    Take Care and stay alert, things happen quickly in this environment.

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