Iâm starting this rather early tonight, at least the initial part. It is right now 530 ET, well before we know who is going to be the next President of the United States of America. Very soon we hope to know if Mr. Bush will continue to be the commander in chief or if Mr. Kerry is going to take on that job. It has been a bitterly contested election and no matter who wins there is bound to be sour feelings on both sides, but I want to urge all of you to respect whoever wins tonight. In the end each of us are Americanâs and we have the right to choose our leader, and whoever it is that we choose deserves our respect and backing. I sincerely believe that both Mr. Bush and Mr. Kerry have the nations best interest at heart, even though they may not agree on what that is. It is our job as citizens to do whatever we can to help the president. Our economy and our security are both in the balance and who ever we call Mr. President is going to need our assistance. He also deserves our respect due to the office that he holds.
The markets started off the first few minutes of the day down and looking weaker, however it did not take long for a strong reversal to set in and move stocks higher. If you have been reading this you know that for the last several days I have been a pretty aggressive buyer. Around noon I changed my mind and went 100% to cash, where I currently remain. This had nothing to do with my thoughts of a Kerry or Bush victory, but rather my concern that the markets were pricing in perfection. To the markets perfection at this point means that President Bush would be the clear winner, and it would not be uncontested. I have no idea if that will be the case, but I was not willing to have money riding on an unlikely outcome. My feeling is that we have now gotten a bit overbought and there is downside, up to 10% if things get ugly, but more likely around the order of 3 to 5%. In any event I was sitting on nice profits and gave myself the liberty of taking them and then laying out by the pool for the majority of the day.
Crude Oil futures fell below the psychologically critical $50 mark for the first time in four weeks on expectations that rising inventories are going to offset demand. This goes along with what Iâve been saying for the last few days: If you want to be short, do so in the oil stocks. A clear top has been put in and there is significant downside from here. Everyone is still long, and that pain can carry a market a long ways once they start getting bitten by it.
The S&P500 gained an incredible 0.07 points to close at 1,130.58. The NASDAQ was equally incredible, tacking on 4.92 points to close at 1,984.79. Volume was higher across the board, with 1.65 billion shares changing hands on the big board, a rise of 11%, and 1.84 billion shares on the NASDAQ, also a gain of 11%. I tend to be a grumpy trader, but I hate it when volume picks up after an extended move to the upside and no movement at all occurs. To me this always suggests a real lack of commitment on the part of the bulls and a short term top. I feel even stronger about that when the reason we close flat is that we had very aggressive buying in the early part of the day but give those gains back into the close. The reason for this is that professional traders tend to be most active into the close and they tend to be the elephants that we have to follow. So, for the time being I am looking for a pullback in US Equities. On the whole I remain quiet bullish if for no other reason than the momentum crowd should start to really pick things up off this strong monthly and weekly chart breakout. That can easily give us a few months of upside on nothing but people putting money to work. Longer term I think the market is toast, but to be quiet honest with you I have no idea what I will be eating for breakfast in the morning, and thatâs only 10 hours away. So, its best to play it day by day until there is some confirmation. For now the market continues to move higher, even on bad news. This will catch up with it latter, but its far more profitable to let the market tell you when that is than to invest your opinion in it.
Right now Tech continues to lead. The brokers, semis, networking stocks, transports, software, internet and networking groups remain very nice places to have investments. Continue to look at the stronger stocks in those groups to put your money to work in. I will say this again, even though for the very short term I am in cash, I do not think it is the place to spend too much of your time right now. Be putting your money to work.
The markets started off the first few minutes of the day down and looking weaker, however it did not take long for a strong reversal to set in and move stocks higher. If you have been reading this you know that for the last several days I have been a pretty aggressive buyer. Around noon I changed my mind and went 100% to cash, where I currently remain. This had nothing to do with my thoughts of a Kerry or Bush victory, but rather my concern that the markets were pricing in perfection. To the markets perfection at this point means that President Bush would be the clear winner, and it would not be uncontested. I have no idea if that will be the case, but I was not willing to have money riding on an unlikely outcome. My feeling is that we have now gotten a bit overbought and there is downside, up to 10% if things get ugly, but more likely around the order of 3 to 5%. In any event I was sitting on nice profits and gave myself the liberty of taking them and then laying out by the pool for the majority of the day.
Crude Oil futures fell below the psychologically critical $50 mark for the first time in four weeks on expectations that rising inventories are going to offset demand. This goes along with what Iâve been saying for the last few days: If you want to be short, do so in the oil stocks. A clear top has been put in and there is significant downside from here. Everyone is still long, and that pain can carry a market a long ways once they start getting bitten by it.
The S&P500 gained an incredible 0.07 points to close at 1,130.58. The NASDAQ was equally incredible, tacking on 4.92 points to close at 1,984.79. Volume was higher across the board, with 1.65 billion shares changing hands on the big board, a rise of 11%, and 1.84 billion shares on the NASDAQ, also a gain of 11%. I tend to be a grumpy trader, but I hate it when volume picks up after an extended move to the upside and no movement at all occurs. To me this always suggests a real lack of commitment on the part of the bulls and a short term top. I feel even stronger about that when the reason we close flat is that we had very aggressive buying in the early part of the day but give those gains back into the close. The reason for this is that professional traders tend to be most active into the close and they tend to be the elephants that we have to follow. So, for the time being I am looking for a pullback in US Equities. On the whole I remain quiet bullish if for no other reason than the momentum crowd should start to really pick things up off this strong monthly and weekly chart breakout. That can easily give us a few months of upside on nothing but people putting money to work. Longer term I think the market is toast, but to be quiet honest with you I have no idea what I will be eating for breakfast in the morning, and thatâs only 10 hours away. So, its best to play it day by day until there is some confirmation. For now the market continues to move higher, even on bad news. This will catch up with it latter, but its far more profitable to let the market tell you when that is than to invest your opinion in it.
Right now Tech continues to lead. The brokers, semis, networking stocks, transports, software, internet and networking groups remain very nice places to have investments. Continue to look at the stronger stocks in those groups to put your money to work in. I will say this again, even though for the very short term I am in cash, I do not think it is the place to spend too much of your time right now. Be putting your money to work.
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