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Wall Street Week Ahead: Market Is Oversold But Major Signs Say "Sell"
"The market is extremely oversold. Nonetheless, all major indicators remain on sell signals."
"We expect a powerful but short lived rally should be coming soon. But, at this point, baring some major shifts in our indicators, it may only be a rally in a larger down trending market."
Bullish indicators as I see it: "Correction Camp" indicator at an extreme high, and the AAII Bull/Bear Ratio at a low last seen in the fall of 2011. The other indicators did not give me a clear indication about the near-term market direction.
Hi JoeNoEskimo, I don't recall seeing a post from you in the past. If you are new to the board, Welcome. All comments are welcome on any of my post ... and, since we are a community of investors opinions vary. Nethertheless, all comments are welcome.
My take is that we are in a new age of investing. Flack has written on this in the past. I am an old school investor and perhaps for some I keep too much in the market compared to some. I am currently about 25% cash, 25% income and 50% equity & other.
My allocation to equities is based upon my tolerance for risk as determined by my broker and falls in a low range at 40% and a high range of 60%. I usually adjust this form time-to-time based upon market conditions, seasonal trends and my reading on some technical indicators. At the beginning of the year I was about 63% to 64% equity so you can see that I have lightened up from where I started the year. I believe form a traditional sense that equities are oversold ... however, they are not worth anymore than what they will sell for at a given time in the market. And, with this, I look for continued volitality through the summer.
Reply to @kevindow: Similar situation as last year -the best course of action is to stick to your own plan/allocation. At present emotional selling is in place, and it is hard to step in and buy when fear is at its height. More attractive entrance points will come again.
Comments
Here are the latest "Stock Market Indicators," courtesy of Yardeni Research (5/20/12):
http://www.yardeni.com/pub/PEACOCKBULLBEAR.pdf
Bullish indicators as I see it: "Correction Camp" indicator at an extreme high, and the AAII Bull/Bear Ratio at a low last seen in the fall of 2011. The other indicators did not give me a clear indication about the near-term market direction.
Kevin
Hi JoeNoEskimo, I don't recall seeing a post from you in the past. If you are new to the board, Welcome. All comments are welcome on any of my post ... and, since we are a community of investors opinions vary. Nethertheless, all comments are welcome.
My take is that we are in a new age of investing. Flack has written on this in the past. I am an old school investor and perhaps for some I keep too much in the market compared to some. I am currently about 25% cash, 25% income and 50% equity & other.
My allocation to equities is based upon my tolerance for risk as determined by my broker and falls in a low range at 40% and a high range of 60%. I usually adjust this form time-to-time based upon market conditions, seasonal trends and my reading on some technical indicators. At the beginning of the year I was about 63% to 64% equity so you can see that I have lightened up from where I started the year. I believe form a traditional sense that equities are oversold ... however, they are not worth anymore than what they will sell for at a given time in the market. And, with this, I look for continued volitality through the summer.
Have a great day ... and, thanks for stopping by.
Skeeter