Friday, June 1, 2012

We are finally seeing the VIX and VXO break decisively above 25.  Finally.  Boy, has this been an exhausting wait.  FB buyers and the like are capitulating.  Finally.

We only had 12 weeks in a row of the NAZ being up this year-- a record, it was said, a longer streak than even in 1999.  Reality can bite, n'est ce pas?

Note I'm not a short-seller.  I simply have owned Treasuries (and high grade munis) as a natural hedge against the stocks-down/interest rates-down trend we've seen the last few years.  Plus I own AAPL, and some OTC income stocks.  I've simply been blogging "forever" that stocks have fundamentally been overpriced based on historical norms, and relative to the risks.  I presume there are very good reasons why the Fed has been doing what it has been doing and why investors are finally focusing on return of principal.

The DoctoRx rule of thumb is that high-quality stocks can be bought when the above fear indices are above 25, though the timing may be terrible for a while.  Typicall, these moves above 25 carry to or above 30.  I would look for a BTD scenario around there. 

Support for the NAZ is around 2200.

The dividend-paying top-tier NAZ tech stocks are my long-term faves for growth and income.  I would look to scale into them on weakness in the bubble tech stocks (plus I own a fair amount of AAPL as a "permanent" holding).

More to say in a later post, perhaps Sunday night.  A busy weekend looms on more than one front.

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