We had an interesting week in the
market. Although we
stayed fully invested, the smaller caps and leaders
had a fairly tough week, yet the larger caps once again felt little pain. I have to say that this week’s decline shouldn’t
be surprising to anyone that follows the market religiously as we simply moved up
a bit too fast over the past month and some steam needed to be let off. Similar to a steam train, when pressure
builds … it needs to be let out OR you’re going to have a nasty explosion … the
pressure can’t continue to build forever (just as we can’t continue going
straight up forever). Of course, time
will tell whether the current decline is a simple “pressure release” or
something more dangerous.
Personally
I don’t like how aggressively the smaller caps and leading stocks broke down, yet
with the rest of the market holding up and in particular watching technology
stocks hold up stronger than the smaller shares … my fears are calmed a bit. Yet, with
this strong decline in the smaller issues, and such a divergence in the market
I have a feeling we have more downside ahead of us, but for now our signals
stay pointed to the north … fully invested with expectations of higher prices
ahead.
As I
mentioned above, some decline is fine and quite honestly welcomed, so for now
we stay invested and just watch and wait to see if the declines broaden (affecting
more companies) or if it stays narrow (only affecting the riskier positions).
Hope you have a wonderful and
safe weekend.
Respectfully,
Randall Mauro
Resnn Investments, LLC
On a personal note, if you
haven’t had a chance to check out my book, please check out the “look inside”
feature at Amazon here … http://www.amazon.com/gp/product/1499245823/ref=as_li_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=1499245823&linkCode=as2&tag=randmaur-20&linkId=NFV5VUZYKSLNVXMS
