Friday, March 9, 2007

Settling Down?

I was planning on using today as a barometer for the current state of this market. I didn't see exactly what I was looking for, but there were some positives. The anticipated Feb. jobs report was released this morning, and the numbers beat expectations. So again we fell into a common trading theme of up solid in the morning on news, and whittle down all day to finish without a significant move either way. In a way this is good because it shows stability and will more likely bring out more investors. On the other hand, we're at a crossroads. The bulls are saying this was merely a correction, earnings are still strong, job report good, lets buy. But the bears are saying we this correction was at most 5 percent and could be plateauing before another drop. Asian and European markets have been strong the past couple of days, and we haven't done much.

So, it's matter of what side of the fence you're on. I'm holding true to my sentiment that I've carried over the past couple of days. I'm fairly bearish on the broad market in the near term, and bullish through the rest of the year. I am shying away from technology, and am positive on energy.

For example, I've been bearish on Microsoft (MSFT) all year. It's not that Vista is a bad product; its just that expectations are so high for them, and there is no way that Vista will meet expectations. Their mp3 product Zune hasn't done well. To me, they are continually losing a creativity battle to Apple (AAPL). Apple's iPhone is going to be huge as well. I've owned Apple through much of the past year, but am not happy with how the stock trades. They have too large of a trading range for a good investment. They get beaten down by news of the options scandal, and will have pressure to keep up with the current pace they've set for themselves with iPods. Apple is a much better buy than Microsoft, however.

I'm continuing to tout Frontier Oil (FTO). Since my initial recommendation, 8 days ago, Frontier has increased about 2 percent. I continue to like it at this price. I see another 3 to 4 dollars to the upside here.

No comments: