Digestion or Correction?

After finishing last year with nine straight weeks of stock market gains, it is no wonder we would have a period of digestion. The real question is whether this evolves into something worse-a correction. So far, it doesn’t look like it. There is a stock rotation among winners and losers taking place. Value stocks, which were out of favor for most of last year, have been making a comeback. The Bull and his partners predicted this, but we still need more time to see if this shift is sustainable.

At the same time, we do not see the former leaders falling apart. More likely, they stay in trading ranges for an extended period, while returns are made in the catch-up plays. This has been happening for a few weeks now and may be the story of this entire year. We shall see and will adjust as necessary. To reiterate, this market does not seem vulnerable to a big selloff. Stay steady my friends.

The Lonely Bull