The Best of Kass
Among his posts this past week, Kass discussed why it's hard to be bullish right now, why he sold his Procter & Gamble shares, and how he's trading oil stocks.
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Technical Damage Is Mounting
Originally published on Thursday, July 12 at 4:50 p.m. EDT.
I wish I could get more bullish, but I can't.
As I wrote earlier this week, we will likely be seeing a range-bound and directionless market for the next few months. This will provide opportunities for the trading community, but not for the buy-and-hold crowd.
The economic data are growing more ambiguous, and the consensus corporate profit outlook looks less secure. There is a limit to how further monetary easing can provide a catalyst to growth -- fiscal policy remains the solution. But our leaders remain dysfunctional and divided -- and then, of course, there is Europe.
Meanwhile the technical damage is mounting. And, as I wrote in two columns on sentiment this week, investors' confidence has been damaged by a plethora of factors
If you will permit me a metaphor, Mr. Market is like a bathtub with investors sloshing around it, and the movement causing the tub to consistently lose water. There are no new inflows (or water) replenishing the tub. And the only active bathers are the high-frequency traders -- who are doing a disproportionate amount of the splashing. They are wild and unpredictable and don't use soap very often.
Thanks for reading my Diary and enjoy your evening.
I ended the day at about a 10% net long exposure, down from 25-plus% when the market swooned earlier in the day.
Why I Punted Procter
Originally published on Thursday, July 12 at 12:37 p.m. EDT.