Where are we ?

There are times trend is easy to spot, other times, it is like the war of attrition, the battle field is full of confusion, you see enemies and friends dotted throughout the battleground, it is hard to tell where your side of the frontline ends and where that of enemy’s begins.  Such is the time for the market, I found myself to search in vain for the proper words to describe the state of the market tonight.

 

The most difficult part is that it is hard to find the catalysts for both sides, what could convince people to buy after market reached high for the year?  What could scare people to give up the profit they work hard to get?

 

 Fundamentally, the worries or the joys that the investors have today are totally different from just a week ago, even Warrant Buffet said that the worst is over.  We no long worry about Armageddon of the financial meltdowns; actually, we are not even too concerned about corporate earnings today. On the other hand, there are inflations, weak dollars, high energy prices and the other usual suspects, namely, housing and credit.   So, maybe the market reached a point of equilibrium, with investors to wait for more evidences to tip the balance.  In that sense, maybe this week could be a week of consolidations.

 

This of course does not mean that the individual stocks will not move, we will hear the earnings from CSCO in Tuesday (?), that could be one of the straws.  For the time being, market seems like the chance that CSCO will be fine, a lot of the network stocks are up, JNPR has actually out-perform CSCO, so, let’s hope the market is right on this one.

 

Out of international markets, there are so called “BRIC”, China has been coming alive lately, so is Brazil.  Last Thursday, it is said that SP will upgrade the credit rating for that country, a lot of Brazilian stocks went up, by Friday, they went up even more, making them overbought, two of them could pull back tomorrow, ITU and BBD.  This, of course, is not a long term trade, as BRIC shows a lot of strength, it is just a “hit and run” kind of thing, of course, there are a lot of risks involved as you are against the major trend, however, with proper risk control, it is not bad bet, let’s see.

 

Good luck in the new week.