The markets have acted pretty positively over the past 4 trading days. As I mentioned, I thought stocks had been oversold and were due for some sort of rally. The upward move has for the most part been led by the financial stocks, and while I still believe the markets are undervalued, I am beginning to think that in the short term the market should be sold and not bought. By this I mean that I am taking profits on stocks that I bought on the way down, when most others were selling.
The job and economic reports that were released this morning were weak, but they were good enough to stabilize the markets fears regarding the economy and the high unemployment rate. As of 1:45 when I'm writing this, the financial stocks are trading nicely higher on the day, which bodes well for those who've been buying in the sector...the top performing financial stock today is Etrade (ETFC), which I've mentioned several times here as being a company that will more than likely be acquired by another financial firm. The stock is up almost a dollar today (7.2%), and this is probably due to any developments that are taking place behind the scenes regarding a possible buyout of the company...plus it doesn't hurt that today it came out that the CEO of the company recently bought 2 million dollars worth of his own company's stock (as I've said I love following which company insiders buy their own stock because they have the best understanding of how business is going).
Despite all of that good news, I still feel as if the markets will take a pause and digest some of the recent gains we've seen. So in keeping with my short term opportunistic approach, I would continue to take profits as I expect the markets to trade down over the next few days/week. (I wouldn't be surprised if the stock market even finished lower on the day relative to where it is currently trading...).
We shall see
