The stock market has been on a tremendous rally since fall of last year. The stock market has transformed from a place where fear reigned into a magical paradise where stocks never go down. The lesson we learned from the flash crash on 5/6/10 is that we cannot afford to be complacent and lest we forget before the flash crash, everyone thought the market would rise straight to the moon. We need to remember that everything that goes up, must come down. With that preface lets analyze some stocks. WMT, MSFT, CSCO, T, HPQ, and MRK are the most prominent of the Dow laggards YTD and since they are not rising in this rally we should avoid them.. Gold and silver will lead commodities to move higher, however expect gold and silver to have terribly painful corrections.
The market may not crash tomorrow or the next week but the rally we are experiencing is simply unsustainable. Portfolios should be adjusted towards protecting against the downside risk via heavy cash, protective puts (if you understand how to use them) and investments in hard commodities such as gold and silver.
(The Jittery Bear)
The investing world simplified.