The market finally had a down day. Shocking, I know! But, sarcasm aside, the down day coincides almost exactly with the old 2011 highs. So, if you were looking to sell, this Friday would have been good timing.
Where to go from here? The bull case would have the market moving sideways, and then another thrust up. The bear case has the market continuing down. My take? I think we could see about a 10% pullback.
As for individual stocks, thought I’d revisit that gap play I had going on Google (GOOG). I show it, of course, because it worked out. (Losers are totally ignored!)
And you can see the buy-on-the-dip/sell into the gap worked perfectly.
Naturally, this play doesn’t work every time, but it’s something to keep in your quiver, especially if you’re content to hold the stock for as along as it takes to fill the gap.
The second stock I want to look at is Pepco Holdings (POM). They own my local power company Potomac Electric, and I can tell you most people dislike the company. But, this falls into the “stocks I use everyday” camp, and while I might dislike them myself, where else can I go for electric power? In addition, their 5.4% dividend isn’t too bad to have hanging around.
Next week I think will be interesting. I have my “buy” hat on, so we’ll see if the market cooperates and gives me stocks on sale.
Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."