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Some signs things may be stabilizing

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I am seeing some soft signs that the current market hammering might be slowing down. Today we had a temporary rally in all indexes (mainly Dow) and then got shot down again. High fliers such as GOOG, APPL, and RIMM have all made exponential drops over several days and are technically oversold. The overseas markets have shown some rises and the Japan market is making a real rally comeback at the end of this day. I believe this indicates some buyers are slowly coming back into the market. Now, this may only result in a short-term technical bounce or could begin yet another end of year rally. Some market mavens are now calling for a further drop of the NAS, the S&P, and the Dow and absolutely no end of year rally. That, in my mind, is a good sign because I always like to take more chances when everyone is getting totally bearish. Even Jim Cramer is now saying "play it safe" and use "bulletproof" stocks. He might be right, but I kind of like it when Jim gets bearish. When he says buy defensive, then that is bearish for him.

I will continue to build some cash by selling losers. I will redeploy soon. Not yet however

There should be, even if we are going into a year end swoon, a technical bounce and all you "defensive" minded folks should have a better price to sell your stocks and go to cash or "safe" stocks.

For myself, I will not be selling into any technical bounce and I will hold with a diversified portfolio and add positions as I see the market stabilizing. Everyone is getting pretty scared. That fear is justified, but I will be buying into the fear and still anticipate that the year end will look better than it does now.

Doc

Tuesday November 13, 2007 : 12:38 AM

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