Monday, January 23, 2012

Huge Bull Market

It catches you unawares. You are in a safe mode, with huge cash position, ready to trade ranges. Then you find yourself in the middle of the massive rally, forced to by something, anything in order to make money.
As usual, I might be wrong. Often I am. But all metrics are aligned too well.

Fundamentals are good. Most companies report good profits. Yes, US growth is slow, Europe is probably in recession, we don't know what's going on in China and developing world is struggling a bit. But in the stock market, fundamentals are about profits and profit growth, not about the whole economy.

Technicals are excellent. Charts are beautiful. All three major indices are trading above 13-, 50- and 200-day averages. 13-day average is above 200-day MA, and 50-day MA is closing on 200-day. Market is a little bit overbought, but overbought condition can be worked out either in price or in time.

Sentiment is incredibly bearish. Most pundits tell you to be careful, to preserve capital, to avoid bull traps, yada, yada, yada. Only Doug Kass is bullish, cautiously. Nothing can be better for bull market.

Market reaction is great as well. Good earnings are bought (with rare exceptions), bad earnings are sold for a day, without follow through.

Possible problems? Well, best technicals usually happen at market tops...

Buying Back Europe

Bull market doesn't want to die. I know, it's very hard to buy in this environment. You want to buy dips, but there are none around. Well, we play cards we have, not those we want.
I decided to get back into European stocks. It looks like Euro debt panic is subsiding. Today opened a position in Banco Santander (STD). It's the best Spanish bank, with branches around the world. Sure, it has a lot of problems with Eurozone debt, but it will survive. I don't think of it as a long term investment though, I don't really like banks. But it should do fine in the nearest future. I think.

Friday, January 20, 2012

Buying More

Added to Alpine Total Dynamic Dividend Fund (AOD) today. I might be wrong, but my feeling is that we are in a huge bull market right now. Which means that I need to put more cash to work. AOD is down a lot, because it's a fund invested in high dividend stocks in US and Europe.
On a side note, selling part of Intuitive Surgical (ISRG) was a good idea. Not selling part of Google (GOOG) was a bad idea. As usual, you win some, you lose some.

Friday, January 13, 2012

Getting Longer

In line with my yesterday's headline Surrendering to the Bull, I added to my VmWare (VMW) position. I don't know if current bull run will continue. But I feel that my long exposure is not big enough if it does.

Thursday, January 12, 2012

Surrendering to the Bull

I waited. And waited. There should have been a drop. Even a small one.
But bull didn't want to listen. Still doesn't want to. Stock action is very bullish and I decided to increase my long position.
Today I added to my $IFN position. Indian Fund is a closed end fund invested in Indian companies. Stock is down a lot since last August. Current action paints quite nice bowl pattern, which is bullish.
I might be wrong. It can be a buyer's panic. That's why, as usual, I trade in small increments, around 2% of my total portfolio.

Friday, January 6, 2012

When Big Boys Return...

This week was good for my portfolio. More than 1% return, that's great. Overall, market went up. Does it mean anything? I don't think so. Volume is small, movements are erratic and I feel that it's just junior fund managers playing when upper crust is on vacations.
I don't want to say that market will drop next week. I don't know. What I want to say is "let's see what happens when big boys are back".

Tuesday, January 3, 2012

Trading Around

Today I finished one more roundtrip for 3D Systems (DDD). Closed position again, with significant profit.
Year started with a bang. I don't know if it's going to continue. But, I'm starting this year with substantial cash position. I am ready to buy if I feel like that, and I'm ready to sell.