The market got nicked Monday, but seemed to have regained its footing by Tuesday, although there hasn't been much news. Lots of bottom fishing bringing to life names written off only six months ago and points out two things about the market that never change:
* Stocks get oversold because of the crowd
* Stocks get overbought because of the crowd
Yes, right now emotions are in overdrive. Money is pouring back into the market, but its cautious money that was cemented on the sidelines so long there is no conviction. In other words, a couple of hiccups and back to the sidelines a lot of that cash will go. You can call that a form of fear, but there is also fear the train is leaving the station and missing it again would be a personal tragedy. The real tragedy is being out of the market so long and now rolling the dice with an artificial window that could actually be a mental trapdoor.
We moderate exposure to the market but never have subscribers completely out.
This Dow 14,000 drama could take a while to play out, this is a giant barrier, after all-a major index moving to an all-time high. Value is more difficult to find than when everyone hated the market, and some people are looking for instant success--trying to make up for lost ground. Just get in the market and stay in the market, ringing the register often to lock in gains and moderate risk.