$SPY After gaping up
at the open, stocks spent most of the day Friday fading off the opening rally.
Just like what we saw on Wednesday, small cap and technology stocks led the
fade and under performed. In spite
of weakened momentum, bulls stayed in control with another record close for the
week. All of the indices in the Market Model including the S&P 500 are in
overbought territory, but with the exception of the Russell 2000 any call for a
pullback has been unanswered. As trees don’t grow to the sky, mean reversion
will happen someday. But for now, dip buyers are still eager to jump in on any
weakness. Near term downside is limited. The stock market is likely to turn
quiet as we head into Thanksgiving.
In the coming shortened
Thanksgiving week I will be looking to maintain the year-to-date profitability and
will not be too active. There are twenty
one names on the current watch list with nine highlighted names worth closer
attention on your part.
Should the momentum
continue I may add a few positions attempting to creep up to the recommended
Asset Allocation range of 87.5%, but again not too aggressively. With the Thanksgiving Holiday Thursday and
the early close on Friday I am not expecting too much in the way of directional
change in the coming week.
As a heads up, I will
be working on the Master List Update over the coming two weeks in anticipation
of releasing it in December 6th post and Alpha One Model update.
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