When men speak of the future, the Gods laugh. -Chinese Proverb
The circle and the green arrow on the chart above is May 2008. The high that day for the S&P was 1440.24. We tagged 666 about ten months later. We closed today at 1422.38, so we are about 18 handles away from almost a four year high.
I think its fair to say that about 90% of the pundits have already achieved their 2012 target on the S&P and it’s only April 2, so what do they do now?
$AAPL continues to defy logic (and gravity) on a daily basis and just goes higher. Sector rotation is still on steroids, although there was great market depth and breadth today, with pretty much everything participating. The Homebuilder ETF was the only one that I saw red, and that was only down 3/4 of a percent.
Here are some theories right now:
1-Earnings and margins will suck as they get released over the next few weeks and that’s why you should sell the market.
2- But wait…..April is historically a great month for stocks, so stay really long stocks. I did learn today that this statistic is for the most part true, but not so much in an election year. We are in a n election year.
3- The market is as overcrowded as Olbermann’s inbox, so there is nowhere to go but down.
4- But …. “Sell in May and go away”. LOL. If you listened to “Beware the Ides of March”, you missed making money not being long.
5- We will pull back until September, and then launch higher as we get more clarity on the election.
6- There will be QE3
7- There won’t be any more QE3
8-blah…blah…blah…blah
NO ONE KNOWS. So my best advice is to turn off the TV and the pundits. Most were horrible at trading baseball cards as kids and aren’t qualified to trade stocks anyway. Most can’t manage a checkbook let alone money. Some can.
Do your work. know your chart levels and don’t marry anything up here at these levels. Everything is still a rental, but as I always say, it all depends on your time frame.
And most important, hold your friends close and your enemies underwater.
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Have a great week and remember that we are closed on Friday.
Joe