It would be very easy to review today’s action and formulate a strong opinion about where we go from here. Raging bulls will say that the recent weakness is simply profit taking and it is only a matter of time before we base out and start another leg up. The Perma-Bears can also growl a bit louder now and warn us that today’s crack signifies an end to what was already an overbought market and that now we are doomed forever.

At Shark HQ we are exercising one of the most challenging tasks in investing; patience. It would be foolish for us to rush into the weakness committing capital and hoping for a turn. Furthermore, since we have already raised our cash levels it would be just as foolish for us to hit the eject button and encourage others to do so. So for now, we wait. We enjoy the ability to take care of other tasks such as editing a new book, reworking business plans or sending the Q-man out for Chinese. So often, investors will get sucked into the belief that they MUST do something, when in reality it would be better to do nothing. As boring as it may be, we believe now is one of those times.

Despite our lack of action, we still formulate an opinion so that we are ready should it come to fruition. We feel that today’s action was orderly and much needed if we are going to see an end of the year sprint. There is no question that many had become too aggressive and the action became euphoric. This is what previously led to our desire to raise capital and step aside. Despite the recent consolidation, the technical picture is still healthy and until otherwise we will remain optimistic about where we go from here. We are actively putting together lists of stocks that are experiencing a little “woodshed” action albeit on light volume or those that are holding highs despite their colleagues who are receiving the lashings. If the action does turn positive again, these will be the areas that will receive much attention.

So for now we sit back, close out the Christmas shopping, finish off that last egg roll, and tidy up the to do list. Don’t have too much eggnog though, if Santa does come early one must remain sharp and ready to participate in the gains available.

Have a good evening

Rev. Shark