A Few Random Observations

 | Apr 30, 2014 | 9:40 AM EDT  | Comments
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I'm having eye surgery today, so I won't be posting for a couple of days. In the meantime, here are some random observations to consider:

  1. The senior indices continue to cover up the carnage that has occurred under the surface. Many momentum stocks, biotechnology names and speculative small-caps have corrected 20% or more. There have been subtle signs of support, but the refusal of the DJIA and S&P 500 to correct is keeping sentiment elevated and has delayed the more viscous correction that is going to hit eventually.
  2. There is talk that the economy is still weak enough that the Fed could delay its tapering to some extent. It is unlikely that would be a big market positive as we already have plenty of cheap money and very low interest rates. This market needs growth rather than more Fed support.
  3. Twitter (TWTR) is having limited impact on Facebook (FB) and other social-media stocks initially, but it is more ammunition for the bears, who believe that many technology names are still grossly overvalued. While TWTR's trouble is probably company-specific, it does help to create additional headwinds for a recovery of high-momentum growth stocks.
  4. Despite the senior indices, the overall market is still correcting. There are a few good charts and no assurance that a bottom is at hand. I remain defensive, and any buys I make will likely be for quick flips.

Good luck, and go get 'em.

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