So We Wait
The market
had its bounce and now the question is whether or not it will
actually amount to anything significant, such as a bottom of the Big Bad Bear we
have all seen over the past year-and-a-half. So far, it doesn’t appear very
likely, as yesterday’s rally came on lower volume than the previous day. As I
am writing this column, the market has already taken out the early morning lows
and appears to be dropping further.
Now for the good thing: We do have a
rally in effect from yesterday. And until we take out the lows, we should be
looking for a confirmation of that rally as early as Thursday of this week.
There don’t appear to be very many
candidates to rush out and buy if the market did manage to follow through on the
latest rally. Security and Defense firms have seen a flurry of activity, but
many of these companies have problems with them and therefore do not look too
attractive…at least not yet.
(
CACI |
Quote |
Chart |
News |
PowerRating) continues to move higher
following its recent breakout to new highs. Engineered Support
(
EASI |
Quote |
Chart |
News |
PowerRating) is
experiencing a day of distribution after breaking out of a short, six-week base.
Thinly traded Gentner Comm
(
GTNR |
Quote |
Chart |
News |
PowerRating)
is rocketing higher, as investors are apparently anticipating the demand for
telecommunications products following passengers’ lack of desire to travel
around the globe.
A few other companies have shot higher
in the wake of recent events, but other than offering quick-trading profits and
losses, these situations rarely amount to sound investment candidates for the
intermediate-term investor. If a stock sits 50% off its high and then breaks out
to a new high within a day or two, it becomes very obvious to institutions,
investors and traders alike. The best investment candidates are stocks that have
yet to be discovered. When the market does manage to begin a new bull leg, the
weeks and months ahead will slowly reveal strong potential investments that have
not become obvious, or have been forgotten about.
In the meanwhile, after searching very
thoroughly over the weekend, I have not managed to locate such investments as of
yet…so we wait. Eventually and inevitably, they will come and we will have the
chance to make lots of money. For those of us who have been influenced by Bill
O’Neil, take a look at what he is saying today on page A11 of Investor’s Business
Daily, it was quite interesting and I would love to
read your reaction to this, as I
saw many different responses to the article that he released on May 3.
Only a week-and-a-half until the Big Event
in Las Vegas!
As I mentioned before, I will be going through my routine that keeps me focused
day in day out, week in week out, regardless of what the market is doing. I
would also like to respond to questions that investors are faced with and
welcome your thoughts and comments about this as the event draws closer.
Until Thursday,