Respect the Warning Signs. Short Financials If the SPY Closes Below 125. Keep Positions Small


This week, the tug-of-war between bulls and bears reached a new level. The pressure on each side is building and market volatility will increase. Asset Managers have small gains to show for the year and they don’t want to miss a year-end rally. Stocks are trading at a forward P/E of 13 and they are cheap. Balance sheets are strong and companies are buying back shares. Interest rates are near historic lows and that makes bonds a poor investment alternative. During yesterday’s FOMC statement, the Fed said that it plans to keep interest rates low for at least 8 months. They …

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