The Market
Breadth Ratios are still weak. Investing in growth stocks is not working in
this environment.
Investing in dividend paying value stocks is working but currently
there is a downward pressure on prices, when looking at both the weekly and
daily time frames. This means that on a weekly time frame it may be another 4
to 5 weeks before the downward pressure on prices dissipates. In the meantime do
not add any more money to your portfolio. Read the blog of July 31, 2012 for a
detailed analysis of what is being said on today’s blog.
There is an important rule to remember in investing, that
if the market does not behave the way you expect it to behave, and your method
of analyzing the market is sound. It does not mean that your methodology is wrong;
it means that something “bigger” is at work. This should prompt you to step
back and reassess the underlying trends.
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