This post may not offer much for short term traders.
Capital markets are going through some sort of shake out. Whether you think this is a big or small shake out depends on you psychological make up, I suppose. The point of this post is to remind you that markets go up and market go down. Big picture demand issues have not changed from last week to this week.
There are several headwinds that confront US markets . They are the same headwinds that I have been writing about for months. Regular readers will know I thought the market would rally into the new year and may have a tougher go for 2005. I don't know if the second point will turn out to be right and I don't put a lot of stock in a few days trade.
One thing I have written about is global demand for energy increasing in China and India. The selloff in oil over the last few weeks doesn't change the long term demand situation but all of the energy names I own are off their highs. While that is no fun, I have confidence in the names and I continue to collect above market dividends from them.
If/when the market signals a problem with demand for stocks I will take action. For now have faith in what you own. This is how markets work, no big deal.
Wikinvest Wire
3 comments:
Roger - Hope you are digging out OK! Thank you for the encouragement. I hope things turn around for the Markets. Today, it looks like all industry classes went down - sans paper. Ouch! I am surprised that energy has been getting hit too.
I guess we wait for more certainty regarding interest rates..?
Cheers,
Jeff
Reply to JWK:
Thanks for the comment. I actually spent the Ron Insana show shoveling snow outside, sorry Ron. Just a word about interest rates since you brought it up. I think the market has a good an expectation of how far the Fed will go, yesterday's comments notwithstanding. I think that for a while now the Fed has followed the bond market, when was the last time there was a fed move that wasn't already priced in? The middle of the curve had stayed low to most people's surprise while the short end has risen. I am more interested in that action than what the Fed is doing.
Maybe stocks shake out a few more days, maybe longer, but the thought of trading range that everyone talked about mid-2004; well this is what it looks like. Thank you again!
I think you are right on the money for this shakeout, the put call ratio has been building over the past several days. As an indicator of fear it's ususally a good guage (in the short term).
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