Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Tuesday, March 22, 2011

Correction over?

The US market was down just 7% at the lowest point in this recent correction.   Momentum (right hand chart) is now fairly oversold, not as oversold as it was during the European debt crisis of June/July last year, so it (and the market could go lower).  But I suspect not:  the economic recovery is just too strong.  Earnings are up over 40% year on year, and much of that is coming from top-line growth, i.e., sales, not margin expansion.  I'd be a buyer.  For now.  For the next six months, but perhaps not after, the risk of being out of the market is still higher than of being in it.

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