…an independent advisory firm building wealth with active portfolio management

Market in UPTREND…but I’m staying out, for now

Today Investor’s Business Daily (IBD) confirmed the market was in an uptrend.  They’ve had the market in correction for about 43 days…something we haven’t seen since the recovery got underway.  This has been a turbulent year, IBD has only had the market in “confirmed uptrend” for about 40 total days all year.

I’m not one to argue with or fight the market.  When it’s up, it’s up.  However, for now I am still mostly remaining on the sidelines.  That could all change tomorrow, if something spectacular occurs.  Otherwise,  I plan to patiently remain in cash for a little longer.  It’s been a turbulent five months, with more trading volume on Losing days than Gaining days.  At this point, I’m more concerned with risk management than growth.

Yes, the blue chip indexes are making new highs, and in recent days the NASDAQ and Russell2000 have performed well…BUT trading volume remains weak. Today the S&P500 hit a new high but trading volume was 12% below average.  The NASDAQ was up a substantial 1.22% today but volume was 9% below average.

I’m cautious because over my nearly 30 years of investing, I’ve learned that the best way to make money in stocks is to NOT LOSE IT.  If a solid uptrend is underway, there will be multiple entry points.  If this is just a “dead cat bounce,” I want to avoid the risk and preserve my capital for smoother sailing.