g****r
发帖数: 306 | 1 My interpretation:
With the earnings season coming to an end and the 3 indexes at such a high
level, the market may well deserve a significant pullback or break.
Solar and shipping stocks may still offer some speculative opportunities
before their ER announcements in the next few weeks to come.
A good article to read for generally understanding the market behavior.
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Greece Fear Factor May Have Caused Most to Miss Rally
Published: Tuesday, 7 Feb 2012 | 2:46 PM ET
All those sidelined investors waiting for a good entry point to the stock
market may have watched a perfectly good rally pass them by.
Market volume has been on a steady dropoff since concerns over European debt
re-emerged last August, even as stocks have been on an equally persistent
climb.
But rather than being prudent as they look for the numerous fears and
uncertainties to subside, the retail investors who have sat out the turmoil
have run the risk that they'll all start piling in too late.
"The all-clear sign is probably never going to happen," says Keith Springer,
president of Springer Financial Advisory in Sacramento, Calif. "The market
is going to rally so much that the average investor will get complacent,
throw in the towel and get in. And that's what typically happens at market
tops."
The danger is that when the retail investor gets in, the big-money buyers
will start taking profits and the market will turn lower.
In market terms, it's called "capitulation" — that moment when investors no
longer can stand against the tide and finally join the crowd. Though often
associated with market bottoms and the accompanied selling, this time around
capitulation [cnbc explains] would coincide with the top of the rally when
investors get caught buying high and selling low.
After all, no one could be blamed for fearing this market.
The near-certainty of sovereign debt [cnbc explains] defaults in Greece and
elsewhere presents the great unknown of whether Wall Street is heading for
another Lehman Brothers-like moment.
In the interim, though, institutional investors and high-frequency traders
keep on buying, while money continues flowing away from stocks.
"Really, there's just no fundamental reason to buy this market," Springer
says. "The European situation is nowhere near being solved. It's just in a
lull period. Everyone knows it, but it's off the front page and out of our
face."
Mutual funds that invest in stocks saw outflows of $1.6 billion in January,
while bond funds took in a gaudy $31.8 billion, the biggest inflow in nearly
two years, according to market research firm TrimTabs.
That occurred as the average mutual fund gained a stunning 7.5 percent,
about triple the rise in bond funds.
Yet smaller investors remain planted away from the action.
"There's clearly a lack of conviction or a lack of interest. I don't really
know how to explain it," says Dan Greenhaus, chief global strategist at
institutional trading and brokerage firm BTIG in New York. "There's
basically nobody trading and hasn't been in months and months and quarter
and quarters...Everything just tells me there's a lack of conviction to the
upside, and the downside."
Long-standing correlations also are beginning to break down. Oil, stocks and
gold all are rising together, and like movements within stock indexes also
are well off the historic highs they've reached in recent months.
Though traditionally bearish about the market outlook, Greenhaus says he's
been buying. But he's ready to take a break as well.
"Given the apparent imminence of a Greek default, there's nothing wrong with
saying let's take a break here and see," he says. "I believe with all my
heart that taking a wait-and-see approach is the right way to go. Maybe I'm
wrong and I'll miss a few points, but that's fine."
Of course, somebody is making money as the rally continues.
In fact, it is the investor apathy that is convincing some to stay in until
the crowd becomes confident enough to step in.
"What keeps us enthusiastic about stocks is the fact that the public is not
involved in any way," says Dennis Gartman, hedge fund manager and author of
The Gartman Letter. "We know this because investors are and have been
pulling money from their mutual funds consistently over the past several
years."
It's likely the old story then — fear and greed dominating the market, with
retail investors missing out during the fear stage and then getting
suckered in when greed takes over.
Says Gartman: "The public is frightened of investing, and if the public is
frightened we should be enthusiastic." |
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