It s inconceivable that the market is now ready to take off towards Dow 12000 and beyond. The Fed would certainly not like that and would tighten even more. Bears waiting with baited breath for the big collapse will welcome Henry Kaufman s recent prediction of a recession beginning in 12 to 18 months. This was reported in an interview with Marshall Loeb at CBS MarketWatch . Though the major averages have bounced back this week up to resistance levels, only the top tier stocks participated.
New lows are still staggering compared to the lonely few making new highs for the year.
One should not be overexposed in this climate. It s best to have lots of cash to put to work when that selling climax ensues. Be wary and trim holdings on strength. Another excellent strategy is to sell calls on major holdings. Press this link for more information.