Bloated Stock Market
6-13-07: The recent market decline suggests the stock market is definitely in correction mode. We had been expecting to see some sort of correction for about a month now. The daily record breaking close cannot continue at this pace. Our view is the market is not yet done correcting and investors should hold on tight. Although the DOW rallied 187 points today, we believed this is temporary. One should take this opportunity to cash in recent gains and consider selling the losers. Personally, we believed this market is too good to be true.
It is clear the Feds will not be cutting interest rate any time in near future. Bond yields are heading higher, which means it is a formidable competition for stocks. The housing market continues to struggle, albeit, things are not as bad as some had expected. While all is not gloom and doom, there are signs this market has gotten way ahead of itself. As this market corrects itself, we do see many opportunities. Some are obvious, others are not so. Drop by in a few days as we plan to post the stocks we believed are currently trading at discount.
