Thursday, April 19, 2007


The market continues to baffle me. After overnight weakness across Asia and Europe I was expecting a 50-100 point downday. We still have 2 hours to go but I highly doubt we will see a selloff of high magnitude. Currently around 19 of the Dow components are higher which means this rally is not all that broad based. Midcaps and Small Caps are lagging and the PHLX gold/silver index is getting hammered. Only 8 of my 22 long positions are actually up on the day and most of them barely.

Looks to me like there is rotation going on into the large cap less volatile stocks. I figure even with a recession these large caps will not drop by much considering they are multinationals with a big portion of earnings coming from overseas. Being long the big cap Dow names is probably the safest bet out there. I think the only Dow component I would stay away from is GM. The rest all look like buys.

UPDATE In between the start and finish of my post, the Dow lost 25 points. Maybe the market is sane afterall though I would not get my hopes up.

1 comment:

Matt said...

The Fed juiced the market this morning.