Sunday, December 2, 2012

Persistent upward momentum but still short term risk ahead.

Stock market ended the week about 1.5% higher than the previous week with about an 1% pullback at the early part of the week. With the persistent upward momentum the last two weeks, this lessen the possibility of a big pullback correction back to the November lows 2+ weeks ago. Given the short term overbought there's still chance of some consolidation/pause or pullback. If the strong momentum continues then there could be no more than 1 to 3% pullbacks as the stock market make a slow move higher. With the uncertainty for the moment I don't intend to trade more than 20% of my portfolio this week (unlike 2+ weeks ago when I was 100% invested based on the medium term buy signals at that time.)
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2 comments:

  1. AnonymousDecember 10, 2012 at 7:50 AM

    Of the major indexes, only the Nasdaq and Nasdaq 100 was weak last week. The Russell 2000 paused and held its ground while the Dow and SP500 moved slowly higher. Looks the rest of the indexes and stock market will be joining the Dow and SP500 this week. --- JimmyC

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  2. AnonymousDecember 12, 2012 at 7:12 AM

    I reduced my positions from what I had...down to 10% and raised my sell stops. Nasdaq and Nasdaq 100 are the weaker indexes compared to the Dow and SP500. Risk is still there due to short term overbought conditions for now despite the current trend higher. --- JimmyC

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