The market has been so bullish this past month that I am amazed. Some have described it as "dull", which I certainly understand. The major indices have churned a bit but continued to "melt up", just grinding along on an upward trajectory with little pullback or consolidation. While this is great for my investment bottom line, it also means that the market as a whole is overbought, meaning its overextended. While folks continue to fret over various things, like Greece or monetary tightening in China, overall its just extremely positive across the board. The contrarian in me is sounding a bit of a warning here that a "surprise" may be on the horizon. Who knows? Not me, that's for sure. Nevertheless, I watch the larger market, pay attention to the advice I pay to receive, and monitor my positions closely.
So what does that mean? Well, I am ready to pare back or close my weaker performing stocks at the first sign of a turnover or significant pullback and am considering piling more into my best performers, as they will hold up best through any correction. I think that is all I can do for now. Be prepared to react to what the market shows. Remember, we don't determine market direction, we can only capitalize on what it does or doesn't do.
Healthgrades (HGRD), which I mentioned before, has taken a large step back on no news. I am curious to see how this stock reacts during the upcoming earnings season. I hope this one doesn't become a victim of "sell the news" reactions, and hopefully this large pullback will prevent that. For now, I am holding this one.
Las Vegas Sands (LVS) has been on a tear, and I couldn't help but jump on the train. It has great momentum based not so much on its US operations but more so overseas expansion. With the economy here recovering and places like China continuing to explode, I think this will be a winner. Take a look and see what you think.
Finally, gold is a good play during times when we fear inflation. I own the SPDR Gold ETF (GLD), and its on the move up now. I will write more later on this commodity, but suffice it to say that precious metals are probably a good bet this year despite the lack of inflation right now. Consider it a hedge play...
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