Special Risk Capital Management LLC

The Back & Forth Continues January 31, 2015

Please see my monthly client report under the ‘newsletter’ tab for more information, but from the chart below it’s easy to see that we remain in a trading range.  Back and forth we go until some item drives investors to make a commitment either up or down.

Earnings are mixed with about as many positive surprises as negative ones.  Market Sentiment (note chart above) remains weak.  There just does not seem to be a willingness to commit right now.  Technically we’re in a “likely” re-accumulation phase and that could last quite awhile but . . . there is always a possibility of a nasty surprise to the downside (note last September).  It would appear that a significant negative economic piece of news could spark a sell off (Greece and the EU conflict?), but it’s hard to predict that.

Looking at “Money Flow” for the S&P 1500 component stocks (below) there just isn’t that commitment to buying.

And so we remain within a range for now.  There is general strength in more defensive sectors and select opportunities in semiconductors, biotech and healthcare, but very select.  Keep a close eye on things, as they can change very quickly.  Honor those stops.

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