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A correction? Looks like not.

Yesterday I wrote about a possibility of market turning into correction or pullback. I was aware however about new money flowing into the market, although in slowing pace than a month ago (see the yesterday’s chart and Chaikin Money Flow; any value above 0.10 is considered as heavy buying, although it is slowing down). Today, it was proven that investors were jumping in buying the dip. The market stopped for a moment to take a rest. As I mentioned yesterday, the sell off could only be a bump on the upward road. The market can only rest a bit in a consolidation pattern before it shoots higher. The earnings season was very strong and it is what keeps investors buying stocks. In my opinion, I would be cautious, because it is now difficult to see what the market wants to do. So I am sitting aside and saving money for upcoming opportunities. I will be buying stocks at these levels only if they present themselves as a great buy – lower than fair value, great story, pullback, etc.





2 responses to “A correction? Looks like not.”

  1. admin says:
    February 6, 2013 at 11:52 pm

    Agree. That’s why I am cautious. I also need to be careful at these levels since I am leveraging my account. If done improperly, the downturn can be very painful.

    Reply
  2. Brick By Brick Investing | Marvin says:
    February 6, 2013 at 6:22 pm

    Great analysis and reasoning Martin. Honestly this market good get all the way up to stupid levels like 2000 and 2007 only time will tell.

    Reply

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