Today was back to the oil driven market with the US$ down fairly hard giving it no help whatsoever and at the same time the gold did little of anything. The market was split with AAPL, GOOG and AMZN up and firm while energy was falling.
The volume was 2:1 down and advance declines not quite so bad at 1200 up and 1700 down. With the bearish sentiment remains just around its long term average and the bulls still over 20% below theirs, we are really just continuing to work a bit higher day by day.The S&P500 edged up to a new high at 2178 before closing down just $2.76 or a meager 0.13%.
While there are a plenty of reasons to consider this market toppy and overvalued, we are still the best house in the bad neighborhood. Rates are higher, dividend stocks that generally replace bonds are crowded, and getting more so.
When we see companies like EXXON borrowing to make up the shortfall between free cash-flow, capital expenditures and dividend payments it’s usually pretty late to the party and the punchbowl is nearing empty.
We bought a few calls on WTW ahead of the earnings due Thursday since it has a huge short interest and some pretty ugly comps. Any surprises and I wouldn’t be surprised to see a $2 gain. We also bought some QQQ puts for a balance in case we do wake up to a bad European morning that carries over here. We also bought a little PRGO using a very close stop. Most of our positions were bought near support anyway, so if we do turn down we won’t be hurt badly. CAM
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