Thursday, November 17, 2005


The three week old market rally has resumed this morning after a few days of consolidation. The rally is getting a bit long in the tooth. As a long term investor, I suggest staying fully invested in stocks but aggressive investors might want to sell into additional strength; not yet, I said additional strength.

Short term trading is impossible to get right consistently. In a market where stocks are cheap relative to real estate and to bonds, most should stay fully invested in stocks. Aggressive investors who trim a little as the rally progresses will be taking a chance to never see these prices again.

There is without question a bias growing that this is "the year end rally". It may or may not be. Generally one wants to trade with the trend until it is clear that the majority are all jumping on board. When the majority get a little excited, one should expect for the market to go too far too fast. Again, I don't think that has yet happened in this case but a little more strength could cause technitions and others to jump in with both feet. I believe the "BIG BULL" is getting close to a big run but one would expect sentiment figures to be very negative right before the start.