A couple of sectors has turned bearish in US market. Look at our market sentiment indicator.
Healthcare sector and Energy sector have both turned bearish last Friday on 22 Feb 2013. This serves as a caution for us to cut down on our long position exposure and reiterates our view that the market may be in for a consolidation in March or early April. If S&P 500 stocks or Technological sector or Energy sector turns down too, that will really signal the end of this bullish run.
Market moves in cycles. If you want to make BIG money, pray that the market drops soon! Buying at this high point now can only serve as a SMALL Ang Bao.
Our Trading Advice:
1) For those of us who still have a lot of long positions and you are a short term trader, our advice is to profit take some of it.
2) For those who invest in long term (2-3years), get really your money to buy some when your stock falls.
3) For those who have Patience and Cash and not inside market yet, you will have your chance 3 months later.
4) For those who still wants to go in, select individual stocks carefully.
5) For those who wants to insure your portfolio, start to locate some stocks good for shorting or some defensive stocks good for hedging.
Friday's 100 points up move in Dow Jones to me may be just an illusion. This market just needs a catalyst for a downside move. Perhaps this Friday's ISM or next Friday's Non Farm Payroll is a curtain raiser.