Friday's Selloff: Surprise, Surprise
Were you surprised the market sold off on Friday? I wasn’t (although I’ll admit there’s little the market can do to surprise me at this point!).
In any event, the reason for my non-surprise wasn’t the jobs number – although they were ugly – but the fact that stuff like the QQQ had run up nearly 10% in the past 7 days. Hello, overbought!
So naturally the market was primed for almost any kind of bad news and all it took was a ZERO in the jobs number to cause a bear party.
Still, is it all that bad? Not really, because if you look at the chart below, all we’ve really done is stay exactly in that sideways area. In fact, if we drop much lower, I’ll be buying again.
As for individual stocks, I generally look for a 10% pullback from recent highs before I start my purchases. If they pull back more? Then I buy even more. As an example, let’s look at WM (NYSE:WM) below. I figure the recent high is about $33.90, so I’ll start my first wave of buying at about $30.50.
On a different note, gold continues to shine – pun intended – so let’s have a look at NEM (NYSE:NEM). I’m not a fan of gold stocks in particular because I don’t “know” them. I mean I don’t shop for gold, use gold, or am even that fond of gold. Still, a breakout is a breakout and on the monthly chart below, it looks like NEM might have a ways to run.