Market Direction Outlook Intraday Comments for Jan 29 2013 – Rest Is Over?

Market Direction is back pushing higher as investors seem confident that yesterday’s little rest was enough. Investors are back selectively picking up stocks or in my case Put Selling many stocks. The market direction remains strongly entrenched to move higher. Even the disappointing USA consumer confidence figures that showed a drop to a 14 month low, did not slow the buying this morning and by mid-afternoon the S&P was posting a new 5 year high. Many analysts commented that the consumer confidence figures simply reflected post-Christmas blues and stocks did shrug off the decline in consumer confidence quickly. Even the Case-Shiller news that the housing price index for November increased by a seasonally adjusted 0.63 per cent couldn’t slow the buying this morning. That figure though shows that while a bottom may be in for housing, a national recovery is not gaining a lot of traction.

Many analysts remain concerned and some are becoming even alarmed at the continual extreme overbought condition of the stock market. Yesterday I reported though that more than $55 billion of fresh capital was poured into stocks just in January 2013 alone. This marked the biggest inflow on record for stocks. When compared to the bonds market with its trillions of dollars, $55 billion is a drip in the cash bucket, for stocks it is a major driving force behind the continual push higher in market direction.

Market Direction Mid-Day Action

I did more Put Selling today. Stocks this morning that interested me were some more YUM Stock, Aflac Stock, Facebook Stock, a couple of Trading for Pennies Trades, some Apple Stock and the Barrick Gold Stock trade from yesterday certainly seems to be working out.

Research in Motion continued to lose ground falling 6.7 % after yesterday’s drop of roughly the same amount. Tomorrow the BlackBerry 10 smartphone is to be released. Personally I have a lot of doubt but I do think in the low teens Research In Motion Stock may be worthy of Put Selling.

Another Canadian Stock that is working well is Canadian Pacific which reported fourth-quarter profit growth of 15% over the same quarter last year.

Meanwhile my Bank of Nova Scotia stock trade is working out very well and the stock has set a new 52 week high.

AT&T Stock is up again today so obviously my concern which I mentioned on the weekend may be overblown. However I prefer to be Put Selling T Stock rather than holding it for any period of time.

Market Direction Intraday Outlook For January 29 2013

Intraday the market direction looks very strong. There was a better open than yesterday’s close and then a short little rally before the market direction pushed lower by 10 AM. The market direction push down to 1499 and it seemed to be a retest of 1500 and at that point buyers stepped in. Immediately the market direction jumped back higher and the market set the usual pattern of higher highs and higher lows as it climbed back. At 1507 the market direction is continuing to set new 5 year highs.

Market Direction Intraday Jan 29 2013

Market Direction Intraday Jan 29 2013

The rest of one day certainly is not enough to work out the extreme overbought condition and I will not be surprised to see the markets close off their highs today. That does not mean though that market direction will fall apart here. Far from it. The strength in the advance / decline line, market breadth and incessant buying continues to point to the S&P 500 and DOW easily challenging the all-time highs.

Market Direction Crash After All Time Highs Reached

There are a lot of analysts who believe the market direction will crash once the S&P and DOW reach all time new highs when or if they break through the highs of 2007. I don’t see any signs of this at this point. February though tends to be the poorer of the best 6 months so it may be that February turns into a sideways month. I think the more important aspect of market direction at this point is that it has enough strength to hold and not decline. Any correction in February may well turn out to be less than 5%, if there even is a correction at all. In other words by Put Selling into strength and stay slightly out the market I am generating significant returns and setting myself up to be able to sell more puts extending into March when I expect the markets may push higher still.

I see no signs of a market crash and indeed all signs of topping out do not at present exist as far as my records of past market tops. In 2007 for example

Market Direction Outlook And Strategy Summary

I am continuing to commit more capital to the market as market direction remains firmly up. I will soon be starting to commit more of my margin as well as my capital available for Put Selling will be running out short. I have retained as always, 30% of entire portfolio in cash and my bond portfolio is down to 15% not because I believe bonds are about to crash but because I do not see enough value in bonds at present to be in buying.

Market direction then at mid-day is solidly bullish and I remain Put Selling and stock buying for short trades with all my stock and option portion of my portfolio in use. Until market direction changes and signals for a solid correction appear, I see no reason to change my strategy.

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