Just in case you haven’t noticed, I have not posted in a while. It’s not for lack of topics but rather various sudden and unexpected, even serendipitous, events happening in my family’s lives lately.
Like being sick with a nasty little stomach bug. One day I was up and feeling fine. The next I was down and out for the count. And of course this nasty little stomach bug didn’t limit itself to just one family member and seemed to randomly infect others over the course of a couple weeks. Kind of like the stock market.
Between Greece, China, GDP, Exchange Rates, The Fed and Interest Rates, mixed quarterly reports; a clear direction for stocks has been hard to find.
One day it’s up, the next day it’s down.
And one bad Apple seemed to infect a whole bunch of stocks with a common pattern of decreased revenue, or sales, or missed EPS, or just good old fashioned paranoia.
But it has not been all bad.
Instead of taking a long vacation, we have opted to take rather short trips like to the Shenandoah River and go tubing, to spending a quick day at the beach. All have been very short in duration yet very rewarding.
This pattern is not unlike most of my recent stock trades. There have only been two stocks that I have held any position in for an extended period of time. Disney and Skechers.
All others have been rather quick, sometimes as long as a week, sometimes as short as overnight, trades. Most have been very rewarding.
And that seems to be the nature of the market lately. There are a few well performing stocks. Most are only healthy or worthwhile holding for a few days before their rally fades. Some pundits and internet commentators have used the analogy of a few generals and no army.
In a way, they are right. There are only a few really good stocks performing well out there right now. That’s not to say there aren’t lots of really good stocks. There are. It’s just that sustained rallies are far and few to be found.
Kind of like being sick. There is just not enough energy, be it sales, revenue, economic growth, or what have you; to sustain a rally. Every market uptrend needs an army of good stocks. An army of good stocks needs the right fuel to grow and attract investors. Right now there just isn’t enough fuel for the market to grow.
It’s down, but not out . . . yet.
Right now, investors are nervous and the slightest little hint of a slowdown really spooks them. But also, good solid news also gets them overly excited. Trouble is, most of the time that initial excitement fades.
Look at what just happened with LinkedIn. They reported blow out numbers that got investors, and the stock price, up – way up within the first 20 minutes of after-hours trading. It blasted up over 15%! Then they started talking about how most of those blow out numbers was directly attributed to their most recent purchase acquisition and not to their core business. This spooked everyone that their business was slowing down. And the stock promptly crashed 20% and now sits nearly 4% in the red after hours. It will be very interesting to see what happens tomorrow.
In this weak market, it is important to keep your finances and your capital as healthy as possible until a clear direction is established. Right now the market seems to be just stumbling along with very little healthy energy.
Maybe Skechers should give everyone a pair of jogging shoes. They certainly seem to be healthy and running along at a good clip.
Until next time, be good, trade well and stay healthy!