11/14 Kelly Letter Topics
Weekly market review
The bottom holds
Big bounce volume
Recession projections
The magic midpoint
LevMark Timer holds
Crocs is dying
Hope for Goldman
Importance of retest
As expected, the market is giving a little back before it goes higher. That's good news for those of you who are looking to get in before too much of the winter rally is behind us.
The general trend remains upward. I am especially encouraged by Maxtor's strong showing yesterday against a headwind of bad news: CEO Paul Tufano suddenly quit the company. Chairman C.S. Park took over as CEO immediately. There was no reason given for the sudden departure, but it sure looks bad given that former CFO Michael Bless quit a month ago -- and he'd only been on the job for two months! Evidently, the market feels that a stock down 70% from its 52-week high already assumes trouble. Maxtor fell just 1.8% to $3.85, still up 18% from my buy price of $3.25. As of 10:30 this morning in New York, it's up a penny to $3.86. You can track this and action among my other suggested investments here.
Lest you doubt the staying power of a stock market up so dramatically in the past few weeks, here are a couple of encouraging articles from BusinessWeek:
The market has made quite a run since late October, rising over 7% since Oct. 25. While many believe the market has moved too far too fast, we disagree. The beginning of most major intermediate-to long-term stock market advances occur in violent, upward fashion. This catches many investors by surprise -- and often under-invested. [FULL ARTICLE]
The technical condition of the market has not really changed: the trend for prices remains positive. A retracement would be natural at any time. End-of-day momentum measures suggest that any short-term price weakness should attract buyers, not sellers, so downside risk should be limited. Any price weakness would not change my expectations that a retracement should be limited in depth and duration. We are at the beginning of what has been historically, on average, the three best performing months of the year: November through January. [FULL ARTICLE]
It's not too late, but it's getting later. Know what you want to buy, know the price you're willing to pay, and get it when you can.
