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It’s gonna take time
A whole lot of precious time
It’s gonna take patience and time…
To do it right…
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MARKET WRAP UP 09/08/10
On Monday evening, I argued that the market was ripe for a correction after screaming higher the previous week, from 1039 to 1105 on the S&P 500. As I discussed, the key issue would be whether we would see either a correction in price, or a consolidation over a period of time. After the past two trading sessions, we have essentially corrected in time much more than in price, with the S&P closing today up 0.64% to 1098. In front of the Jewish holidays this week, volume remained anemic. As you would expect during a mild correction, breadth was decent, with pockets of strength amidst glaring weakness.
Unless we are looking at a March or July of 2009 scenario, where we sprint higher in parabolic fashion for the next several weeks, I believe it is best to remain as agnostic as one can in this scenario. If you were bullish when we were at 1040 last week, then now would be an excellent time to lock in some profits and wait for higher probability entry points. Similarly, if you are looking to go all-in short, it is best to wait for more follow through to the downside before becoming aggressive.
My analysis of the leading indices and sectors, seen below, leads me to conclude that more time is needed to digest last week’s move. Accordingly, I increased my cash position today, and will rely on patience to minimize the vast array of mistakes that so often plague market players during a trading range.
George Harrison was right, it is going to take time.
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As usual, good market wrap and insight.
Thanks, again!
Thanks Judith.
Yep, totally agree. Got a nice pop from last week, took 2/3’s off, letting the rest sit there to see what happens. Everytime I have gotten burned lately it has been chasing strength. I like stocks that have dividends so if you get caught going “wha hoppened???”, you at least have some cushion against the shorts and put buyers. Enjoy and appreciate your hard work, sir.
Thanks, Jack.
x3
Your blog is exceptionally well thought out, well written and updated frequently. You have convinced me to join the PPT.
Thank you.
You will be pleased with your decision. If you have any questions about The PPT, just let me know.
`what did you sell to raise your cash? any major changes in your holdings?
Baron,
if you look at my posts throughout the day, I give as much transparency into my trading as anyone on the web.