This week has been rather flat. Wall Street had swing from $13502 to $13637. Is only around 45 point higher than the previous week closing price of $13592.
The last time Wall Street reached this level was 10 Dec 2007. So there is no coincidence that traders are been cautios this week. Nobody want to risk buying at the top.
There isn’t much information around to think that the market would break beyond this level. While the market sentiment is good and governments around the world are taking action to tackle the global economic slowdown. There is a certain grade of uncertainty on where to invest.
There a number of undervalued companies. But with markets as such a high, it is difficult to believe that under performing stocks will appreciate in value anytime soon. Many industries and or sector remain under pressure. Construction, financials and mining just to mention some, have under performed the recent recovery.
Is there going to be a bull market beyond the recovery? Remains to be seen. The stock market is rallying even economic data hasn’t been that great. The rally has been more driven by optimizing and cheap stock than actual great economic data.
The market still have to face the USA fiscal cliff. Which is projected to cause a double dip recession in the first half of 2013.
Investor have to remain cautious. Keeping high leverage position for long period of times are still at high risk.