Special Risk Capital Management LLC

Giving Thanks for a Bull Market, but . . . November 30, 2013

Since there is not much new to talk about and this is the season for giving Thanks, let’s be grateful for the tremendous Bull Market that started a year ago.  The chart below shows the channel that started last November and we’re still within the channel (purple lines).

But let’s remember that this run is NOT usual, so we can expect some form of correction to occur.  The question is when.  I do expect the typical tax selling during the month of December.  I would not be surprised that it could be significant, since these gain can be over a year old (much lower taxes on long-term capital gains).  Since the economy remains in recovery mode, that selling should be short and sweet.  So if you’re NOT in this market, it may be best to wait a week or two; id you are in (like I am) carefully monitor the selling.  If it drops the price to below the lower channel line, I’d be concerned.

Now you and only you know your tax and trading situation, so no advise on that here.  Trading an IRA (no taxable event) and a standard brokerage account are two entirely different situations.  Not to mention your risk tolerance too.  Just don’t be surprise to “see a swoon” in the price in here.  I am seeing one of my indicator showing a move from Accumulation to Neutral (no Distribution as of yet).  So, that may (just may) be the start.

Have a good week.             ………..  Tom  …………..

chart cousrtsey of MetaStock