If you find yourself wondering about where this stock market is going you are not alone. Most of the talking heads on CNBC and other financial media are all over the place about the current market movement. The last few years "sell in May and go away" has worked, but not in 2011.
Just in case you are wondering if anyone else is wishing they got in a week or so ago include me in your list. I had opined a couple of times about nice pricing on options with GS, BP, HCN, and a new stock on my watch list RIG. I was close to pulling the trigger on GS a week ago at a fat profit and just could not find the willingness to do so. I last a thousand dollars or so because I waited. Ditto that for BP. I even sent a friend a suggestion to buy SCCO at the below $32 price just last night and today it closed above $33. I assumed that person likely started to buy this morning and decided not to chase the run up in price, I know I would not have done so. RIG, a deep water oil driller, that is significantly under priced, has of late entered my radar due to a nice new dividend payout, run up some today and I am not sure if to move or wait on this stock as well currently.
Markets like this tend to be nothing more than a bounce off a very oversold position a couple weeks ago. Friday morning we will likely see some moment one way or another in reaction to the monthly jobs report release. If I was a betting person I would bet the market will move up no matter what the report says as the majority of investors will find something good in the report and respond accordingly. However I find myself doing basically nothing at this point either selling or buying as I have learned over the years chasing a market up is fools gold. Of course most people do that with stocks, wanting to buy in when the market is moving up, when the smart money is buying only when markets are down. Unfortunately most people, including me it seems, can not bring themselves to buy when stocks are on sale.
The bottom line here is the economy is showing no growth and I do not expect it to do so in the next couple years so if you are a long term investor buy good dividend stocks and hold. If you are a trader buy when others are selling and sell when others are buying. The good news for me is my significant put option assignments just three weeks ago are looking to get assigned back the end of next week. Either I have been real lucky or real smart. I expect it was more real lucky with some trading experience on the side. These are markets best left alone.
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