BTD, Buy the dip (or BTMFD as one of my twitter friends says) was the mantra during the 2009-2010 run in the markets and it appears to be going strongly in this uptrend. That tells me that the market will likely continue to rise unless something earth-shattering happens (I don’t think a Greek default in the news will affect it for more than a day; subsequent pressures in Portugal, Spain and Italy Might!).
At one point (or maybe 2 points) it looked like we might have a down day for once – down 1% or more – but a late day ramp job took care of that. Professionals typically wait til the end of the day so it’s likely this market has serious support (if you couldn’t already tell!).
A couple of high fliers took off today on good news – 2 of which I played options on – rose tremendously and then kept those gains. I sold one and kept another. I think in a bull run like we’re having now, I have to risk a reversal because the upside could be much much higher. So I am regretting that sold option but i was scarred from my efforts with NUAN (I dumped the call btw) so forgive me if I was quick to take profits in an option contract.*
Overall the action was as it’s been – companies reporting good quarters with positive outlooks are absolutely launching (e.g. BWLD and the 2 companies I won’t mention above). Companies that disappoint get slammed (e.g. NUAN). And in between, the overall indices creep higher daily. Volume has been so so which tells me there is a lot of money on the sidelines. If we get what is perceived to be good news from Greece (it can’t be actually good in any possible way) we might get a second rush of cash, a la first trading day of the year where, like brides to be at Filene’s Basement, we experience a mad rush for stocks and a day with a gap up. If we get bad news that isn’t awful, I think the current trend continues. If we get very bad news, then people might rush to protect profits.
What Am I Doing Again?
For my clients and myself, I only have a few core fundamental long term holdings and many trading positions. I am not married to this market which, in a money printing world, can do whatever it wants in its fantasyland. But I also can’t sit on my hands so I have risk-managed positions on. What’s your plan?
*Excuse me for not mentioning those 2 high fliers. I don’t want this to be a pump up blog for my holdings nor do I want people taking investment advice from me. I am merely sharing thoughts that hopefully, can help in your thinking. For anyone interested in talking to me about formally managing money, I will refer them to my corporate site at Walnut Hill Advisors, LLC.
At the time of this writing, I or my clients own the following investments mentioned in this column: None
Note: this article is meant to be some helpful thoughts to share and not investment advice specific to you. Please consult your own advisor regarding investment and financial decisions. See our disclosures page