Out of Step

 | Dec 05, 2012 | 1:12 PM EST
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If you feel out of step with this market action, you aren't alone.

It's a mix of crosscurrents and aggressive selling of Apple (AAPL) on one hand and strong action in banks due to layoffs at Citigroup (C) on the other. There is strong action in China stocks, which you can see in iShares FTSE China 25 Index Fund (FXI), but there's weakness in precious metals and homebuilders.

Of course, the fiscal-cliff headlines continue to unfold and you never know when one will move the market.

It looks like the algorithms are taking advantage of poor positioning by many traders, pushing to the upside and creating squeeze action in a number of places. That helps produce additional worries about missing the big celebration that everyone is anticipating when the fiscal cliff is resolved.

I took a couple of bad stops on the weak action this morning. That is the price of discipline. You aren't always going to have the best exits, but overall it will save you from major problems, and that is the primary goal.

I continue to struggle to put money to work. Small intraday flips have been my focus, but I prefer loading up on position trades that I can carry for longer than a few days. I don't see much in that regard. Unfortunately, the action isn't helping to set things up better.

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volatility is quite low here, and we could see some downsides here in the short term. ...



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