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Speaking of market comments, it is interesting that the aniversay of the 1987
crash got more news mention by far than the historic 1974 bear market low
(which I experienced) or the start of this great bull market in 1982 (I also
experienced). It even attracted more attention than the 20th aniversary of
the death of Elvis. The only thing that got more attention was our national
bicentennial celebration in 1976. To me, that says boat loads about the
current market sentiment.
The momentum definitely has shifted to small cap stocks. Any correction in
this group of stocks should be considered as a normal pullback and buying
opportunity. The large cap stocks are generally starting to build short term
tops, as are the major indicators. Notice, I said short term tops....at
least at this point in time. I do not yet see major tops. One should note
that the Financial Index recently has been close to setting new highs.
Historically, this index has always topped before the market as a whole.
And this has not yet happened.
Speculative activity has been a little strong as of late. As a matter of
fact, the OTC/NYSE volume ratio recently has been at its highest level in the
past 18 months. This speculation must cool down, which it probably will with
a small cap pullback.
During the reactions around the world to the Asian money crisis, what has
bubbled to the surface is the fact that the U. S. markets (stocks and bonds)
are by far the safest place for an investor to be. However, it is not
without risk. It is probably a good idea to have some cash on hand, and if
you do not have any, raise some. But remain prepared to commit it to the
market at some time during a pullback. Bottom line.......correction, quite
likely......collapse, not likely! But only time will tell us...........
Jerry
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