Waiting for a retracement?

I think fundamentals have changed with respect to US banks. The risk of failure of a large US bank is probably off of the table now. This type of catastrophic event was probably one of the fears that plumbed those March lows.

Surveys that poll levels of confidence have certainly looked better lately which helps to drive markets. When you consider what has occurred it is hard to imagine a scenario where the March lows get tested now. I'll call that a bottom. I expect some type of correction in the near term but I think we'll be higher by year end than we are now.

SimpleCanuck said:

Are you still expecting the major indexes to turn south? If so, how deep are you expecting it to go? If not, what's buoyed your optimism?

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I have no idea. The surest way to look silly is to have an opinion on short-term stock market direction. Valuations still look reasonable, so I'm still investing savings in a diversified portfolio. I think the best course of action is to set a course and stick to it.

CanadianCapitalist said:

I have no idea. The surest way to look silly is to have an opinion on short-term stock market direction. Valuations still look reasonable, so I'm still investing savings in a diversified portfolio. I think the best course of action is to set a course and stick to it.

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Has there ever been / Will there ever be a time when you deem valuations to be unreasonable, and therefore do something else with your investment capital? I am assuming that something else would be paying down debt.

I am pretty much fully invested at this point in time and not looking to change that. When we do fall back (expected in the near future) I would expect we will only go to the 50 day MA - around 9400 at worst.

I would look at that as a good entry point if any more cash should fall in my lap.

Party On!

SimpleCanuck said:

Not too long ago everyone was pretty much agreed that there was a good chance the March 9th lows would be retested. Fundamentals haven't changed much since then (and even less of what has changed has been positive change) and yet there seems to be improving sentiment. Some quarters are prescribing new lows as a necessary condition for true (slow, but sustained) recovery. So is all this optimism just political whitewash?

Are you still expecting the major indexes to turn south? If so, how deep are you expecting it to go? If not, what's buoyed your optimism?

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My optimism was buoyed when the markets started going down. We were buying stock in Q4 2009 all the way until March 2009. Quite a lot of stock. Since the upturn, we haven't done anything. We don't like rising prices.

We hope the market declines before we get too depressed, but the future is always unpredictable.

I was hoping for the March 9 lows to be retested. I was anxiously waiting for it. I have a few dollars waiting to go back in the market.

Looks like it won't happen. As always, my investment strategy is not working.

It would take some pretty horrendous news to make the markets go back to the March lows - much worse than anything we have seen to date. The odds of that happening are pretty slim now that the financial system has been stabilized.

It would also take some pretty bad news to make the Canadian market go below the 50 day MA and I can't imagine what that would be.

A change of plans today- I did sell my Canadian banks earlier...

takingprofits said:

A change of plans today- I did sell my Canadian banks earlier...

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What was your rationale for selling the banks?

They have had a good run and the technicals on banks say they are in for a fall. There is little good that can happen to make them move higher probably until the fall. So I deciced to take some profits and I will buy them back cheaper.

Seems others agreed as after I sold they began their downward march.