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Market Analysis

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We had a bit of a selloff on Friday as fears of the Egyptian unrest took the market by surprise.

We put some money to work on Friday, but I was hesitant to go all in given that I wasn’t sure if the unrest would spread to the wider Middle East and be subverted by Islamic extremists.

Today, the positions we bought on Friday we up very big.

On the char above, the investor psychology seems to be in the continued vein of buy the dips. I haven’t annotated the chart, but the short term indicators show that the overbought situation was corrected on Friday and we are now in bullish territory. The charts are simply illustrative of investor psychology – and the cash flowing into the market keeps investors willing to put money to work when opportunities present themselves.

We have been very busy with the annual rebalancing of client portfolios, making sure that everyone is in the areas where we see the most potential for earnings growth and P/E expansion.

I’ll be writing more here soon about some of those areas, but until then, I’ll be trying to keep warm in this blinding storm.


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Mark