Current Market Status
The market remains in a clear rally, as the Bullish Percents and Summation Index charts show below.
Notable Insider Buying
ACAS - Two directors and an officer bought at 38.40-38.85. Current price is 39.00.
ITWO - Three directors, CFO, and CEO bought at 13.50-13.84. Current price is 14.18. This was purchased for the portfolio on November 30.
IASG - Two directors, COO, and CEO bought at 2.69-2.95. Current price is 3.29.
Momentum Stocks
Oversold momentum stocks on my screens are ABAX, DSTI, ELBO, SNDK (purchased for the portfolio on November 25), and STV.
Market Blog Reviews
Highlights:
The good news is:
All of the major indices closed within 1% of multi year highs on Friday. By itself, that defines a bull market.AT weakness in the recent move means large caps have been outperforming the small caps, a condition indicative of a developing top.
There are no technical problems in the market and there is no significant seasonal bias for the coming week, but many of the major indices have been up for 6 consecutive weeks and by that measure are overbought. It would not be surprising for the market to consolidate for a while.
The Week Ahead
Last Week's review is still pretty much dead on.
The market is still going up and showing every indication that it will make its monthly cycle top in the next few days (in an average December, the top would be Monday). There is a great deal of risk of a decline this week. Everybody is a bull right now and that's usually a bad sign.
Historically, the Stock Trader's Almanac 2005 lists the 4th through 11th trading days in December as down on average. This is actually quite remarkable and this string on 8 down days is in fact the longest such string for the entire year. While December is historically a very bullish month, it is not fully appreciated how much of that strength comes at the end of the month.
After the selling last week the portfolio is now sitting at 19% cash. I expect to continue selling early in the week, getting rid of remaining losers and underperforming winners. By mid-week I hope to have only those stocks remaining which I hope will remain into January (recognizing that any stock can hit its stop at any time, of course).
If we do get the weakness that I expect this week we should then start looking for the monthly cycle low to occur at mid-month. I will then be buying to get back up to all-in status before the Santa Claus rally.
See you Monday!
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