Michael Price's Daily IOT Note: Friday 5/18/12
The stock market is now extremely oversold, and therefore, subject to a sharp short-covering rally. Junk bond funds have rolled over and begun to trend down, so they may move lower today even if stocks do rally sharply higher. Use stops to limit drawdown in low-volatility mutual funds and ignore volatility in the stock market, which is likely to be significant over the next few trading days. Have a great weekend!
The stock market is now extremely oversold, and therefore, subject to a sharp short-covering rally. Junk bond funds have rolled over and begun to trend down, so they may move lower today even if stocks do rally sharply higher. Use stops to limit drawdown in low-volatility mutual funds and ignore volatility in the stock market, which is likely to be significant over the next few trading days. Have a great weekend!