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The market uptrend is holding here and continues to show a slight upward bias. It is important that the market has held the gap made on January 2nd and seems to be slowly grinding higher. If the rally develops, then more names will participate, and those few that are slightly extended will probably give us another opportunity to buy them. The good news is there should be plenty of opportunities to increase your percent invested and participate in this rally, if it’s real.
One concern of mine is that a real bull market is broad and strong. This current rally is neither of those. If you are going to wade in, consider doing so with a few small positions to see if those can gain traction before going deeper. It’s key to start the year with extreme discipline; otherwise, you may create a huge hole that takes the rest of the year to dig out of. Psychologically, it’s a much better year when you’re trading for a profit, instead of trading not to lose more money. Also remember that we are in a fragile, news-oriented market, so being cautiously optimistic with lowered expectations and a short leash is probably prudent at this time.
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Scott, Thanks so much for the follow up on your feelings re: the current rally. I agreed with your prior blog, and found myself very slow to open new positions. I have been more aggressive, though still "small", since the strong FTD-like action at the turn of the New Year. That said, your points regarding the current age of this bull market since the bottom in 3/09 (3.75 yrs), the level of current market distribution, and the psychologic risk of starting the year in a position of weakness, all keep me from "diving in". In addition, after my year end review of trades, I clearly saw that "chasing" at the time of purchase was a costly flaw last year, and, currently, those I find most tempting are those that I'd be chasing! Again, thanks for sharing your thoughts! Brad
Thanks Scott, Glad you chimed in. Been wondering what your thoughts were since your 2/2 Webinar. Given the age of this bull as you said, I've been taking small gains (nailed 5-10% on a few stocks on breakouts: TM, ASGN, CYT, RAX) but kinda regretting selling as the stocks have marched even higher, especially ASGN. But as you said, there will be other opportunities to get on board if the rally gains steam or I may buy these back or others as we get light pull-backs. So I am trying not to beat myself up too much for dumping quickly. Guess I'm more of an unwitting swing trader at this point....LOL.
Thanks Scott ... your thoughts and blogs are always well appreciated.
Thank you for the posts Scott. I too value your opinion very high and admire your family for all the good they have done for us laymen. :)
We must keep in mind that Bull Market can run years i.e. the 1990's. I think one must GO with the "Uptrend" and play it like any other as some leading stocks are breaking out. I have been 100% invested since the beginning of the uptrend and feel this was the right call. WHY? Because this uptrend felt better to met than prior uptrends. Granted with the high distribution level and intermediate market under pressure in the middle there, it has been a little frightening (going with the faith of the uptrend).
Missed out on CELG because it did not have my minimum requirement of 25% recent sales and decelleration in sales and earning year over year kept me out. Did sneak in early on QIHU for a nice move.
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