DJIM #17, 2010
Monday, April 26, 2010 at 07:51AM Lets just have a vote this weekend...Who feels good about this market? Exactly one week after the SEC filed charges against GS, we've made another fresh new high. This is in thanks largely due to a strong earnings week. Sure, not every play moved the way AAPL or NFLX did, but what mattered most is how some of the big companies addressed the current Economic environment and consumer trends. For the most part, things are looking good.
At DJIM, we also expect things to get better with the Economy and thus the market. At this point, calling a hard target on SPX is a bit meaningless because frankly, SPX has already reached a lot of people's expectation for this year. We still have lots of companies, including many commodity plays, that have yet to report. Many of them on our list like X, CLF and ANR are set to report in the coming week and Friday may have been a turnaround day for the sector. This can further put light on the remainder of the year as far as Economy is concerned. For us, we'd really like to concentrate on individual EPS plays for the next few months regardless what happens to SPX. In our opinion, the only way for this market to pullback significantly is if Uncle Sam decides to give this market some poisonous pills to chew on. In other words, without any drastic policy change, we are pretty safe as far as Economy and market sentiment are concerned.
Because the market has reached a milestone at SPX 1200, and many of us believe it's a level that really reflects what's going on with the Economic recovery, we really have to rely on further evidence that this market can take us to a higher level. We definitely don't need to make the mistakes we made in the past and chase this market ahead of the recovery pace. For DJIM, going after individual plays that have demonstrated that sky is the limit is a strategy we'd focus more on.
The coming week is filled with many EPS reports that we'll like keep our eyes on. For now, we are just enjoying the unchartered territory this market's trading in