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Going into September, market expectations were low: after the extensive summer rally, investors were looking for a major pull back, triggered by traders returning from their vacations. The opposite happened: also in the month of September, the S&P 500 was able to sustain the uptrend. As a result, I kept trading the markets from the long side as well. One rule is to never fight the trend.
Moving into October, we can only state the obvious: „dip buyers” are jumping in on every weakness. The fundamental situation still doesn’t justify the current move, but the market is a forward looking mechanism and therefore seems to indicate better economic times ahead.
October earnings season will offer manyinsights into the state of US companies. Strong results and future guidance could offer the next catalyst to move this market forward. I am therefore positioned on the long side through various high beta stocks, like Apple, Priceline or salesforce.com.
On the other hand, geopolitical events could put this rally to a sudden end. Should we get some major developments in Iran, I will not hesitate to quickly move my portfolio to the short side. |