01-05-2005, 08:51 AM
As you can expect, traders are trying to do their best to find logic in the bad start we've seen this week to the new year. Around the bearish campfire, the talk of the day continues to be focused on a striking similarity between now and the poor start we saw back in January 2000. In addition, there is a lot of chatter about the Fed's policy statement which drew concerns that there is more inflation than previously thought and that there is "potentially excessive risk-taking" in financial markets.
To make matters worse, this morning we see that the Investor's Intelligence sentiment numbers marked a new high last week. The number of those who are bullish came in at 62.9, which is the highest reading since January 1987. In the end, I think today should serve as a better guide to whether we seeing something more ominous than profit-taking and the reduction of performance anxiety by the hedge fund crowd. Most of the weakness could be due only to routine portfolio readjustments on a wide-scale, than something more disconcerting. While I'm not trying to put lipstick on this pig, I just think you have to look at the big picture at hand and evaluate the risks and rewards for yourself.
Risk/reward - Going 50% C, 20% S and 30% I today in the hopes the job report is a solid report. I am hoping that the last two days have shacked some people out.
http://chart.finance.yahoo.com/c/5y/_/_dji.gif
To make matters worse, this morning we see that the Investor's Intelligence sentiment numbers marked a new high last week. The number of those who are bullish came in at 62.9, which is the highest reading since January 1987. In the end, I think today should serve as a better guide to whether we seeing something more ominous than profit-taking and the reduction of performance anxiety by the hedge fund crowd. Most of the weakness could be due only to routine portfolio readjustments on a wide-scale, than something more disconcerting. While I'm not trying to put lipstick on this pig, I just think you have to look at the big picture at hand and evaluate the risks and rewards for yourself.
Risk/reward - Going 50% C, 20% S and 30% I today in the hopes the job report is a solid report. I am hoping that the last two days have shacked some people out.
http://chart.finance.yahoo.com/c/5y/_/_dji.gif