Special Risk Capital Management LLC

But Wait . . There’s More ! (?) January 20, 2018

Jan. 19, 2018 – To borrow a phrase from American TV commercials (“But Wait, There’s More!).  A classical “come on” to grab your attention and lead up to a “call to action” (i.e. buying).  This market shows no signs of letting up, but we should keep an eye open for sector rotation.  Even though the indexes keep moving higher; is every sector participating?  And, for good measure, are international stocks doing even better? Ahh Ha, good questions.

Sentiment, Money Flow and Volume Flow all bullish; check.  Prices above the trend channel and above key support levels; check.  And so the trend continues . . .until it stops.  And there in lies the key.

The US markets are giddy about lower taxes and the re-patriotization of offshore funds.  OK, that will last until earnings don’t also increase.  The rest of the world is also recovering from a general world wide recession.  And that recovery may, just may be more stable and less driven by news.  Cases in point are Latin American countries (Brazil & Mexico) and Emerging Market countries in general (notably China).  Japan & Korea doing all right as well.

In the US the oil trade may be slowing, so I’m careful there.  Industrial and Consumer Services stocks along with select Tech stocks are strong.  So, it makes sense (to me) to be diversified among the strongest world sectors and keep an eye open for how the (US) markets react to “bad news”.  Whether it be a government shut down or new special council actions.  This market wants to go higher, but it does not want to lose much money.  I’d call it “impatient”.   If things don’t go well (go up), there will come a time to sell.

I’m “long” but careful to see how this market reacts to news since the economics are a tail wind for the time being.  News is important right now.  Have a good week.  ….  Tom  ….

Price chart by MetaStock. Used with permission.