Just the right kind of balance...
Thursday, July 15, 2010 at 06:31AM We have talked many times on this site about the potential Economic recovery that can last a long time. It is the sort of recovery that can drive many people insane. Why? Most of us have never experienced an "agonizing" recovery like the one we are going through. You can go as far back as the 30’s when the stock market actually mattered, and you won't find a similar example of an Economic cycle that we are going through now. For most of us, we didn't begin to trade till the 90s, for some of us maybe the 80s or even the 70s. Psychology in trading may still be the same, but the circumstance that dictates the psychology is way different. We no longer can rely on one set of data to make a clear case of this market. Due to the volatility of this market in recent months, you can say that this is both a bull and a bear market. However, we have to look at things in a longer time frame to determine what will really come out of this. Once again, we have to say that this is going to be a long and grinding bull market that will outlast even the most patient traders. An example at the conclusion of this Journal shows how selective stock picks could have made you good money even in a long term investment portfolio throughout 2010’s turmoil
So, we got a taste of INTC report last night that the Corporate America can make profit, and lots of it, without increasing their headcount. What is that you ask? That's called lean and mean efficiency! Unemployment may be high, but it doesn't mean that every company out there needs to operate under a recession like scenario. Of course, what INTC may be able to pull off does not mean others will do the same and most likely many others won't be able to. What we do want to point out though is that given time and patience, many more companies and industries will be able to catch up to some degree. It's just so hideous to write this market off and point its head into a double dip scenario.
JPM is also on deck to release its report tomorrow and we don't have to mention how important it is to the investment professional, especially since we are overbought short term and at important technical levels. So far, it's a great start in earning season and lets hope things get even better from here.
As far as trade today, once again dip buyers prevailed and today it was twice, once at gap down open and after FOMC (see alert note) at 1088. DJIM had numerous plays, mostly earnings/ tech related hit NCH's today. They included APKT (off ADTN eps/ ADCT M&A communication equipment stocks) , ROVI, VMW, FFIV. Considering the market has gone nowhere in a wild up and down 2010, it’s pretty impressive these additions to our Shadowlist, mostly 2 Q’s ago are still making new highs today. We added freighter, EXPD to shadow trading list today, CTV yesterday.