With Q1 coming to a close, it’s time to figure out what’s going on in the markets and where might be some good places to be over the next 6 months.
The markets have been choppy year-to-date, but have managed to hit new all-time highs in the last week or two. The particularly discouraging part of the new all-time highs was that not very many stocks made their own new highs. Meaning this all-time high is weak and only a few stocks pushed it to these new highs. That’s NOT good.
And there are some bubbles that are forming (man do I hate that word, “bubble”). In particular, IBB (a Biotech ETF) has been pushing the NASDAQ to all-time highs. Volume in penny stocks (stocks under $5) have hit a high since the tech bubble in ’99/2000. Below is a checklist that I saw in the Wall Street Journal a while back. I’ve been updating it as this bull market gets older. Hopefully by my holdings you’ll notice I’ve been getting more defensive, out of high-growth tech and in broader ETFs and more defensive names. My latest moves have been into TLT, XLP, and EGPT. For me, I’m starting to get defensive for 2014, hopefully by 2015 we’ll be back to 2013 returns. My price target on the S&P 500 for the end of the year is 1,925. Assuming a pull back over the next 6 months with strength returning the end of the year. Momentum is starting to turn negative, leading to the pullback in the near-term.
Move out of these positions over the last few months:
– Sold GDXJ – Junior Gold Miners ETF – Liked this play in the fall, and starting to like it again. If markets stall and/or tank in the next few months (which I think is possible), I might be in this again.
– Sold DTYS – Inverse 10+ Yr. Yield – I like this play over the next 15 years, but in the short term, not going much of anywhere.
– Sold YHOO – Yahoo! – Took my nice gain and cashed it in. Also, all of Yahoo! acquisitions seem to be fruitless thus far.