This Tuesday morning starts with a battle, a fight between the bears and the bulls for control of the recent market trend. The early advantage went to the bulls, but the bears quickly came back. That quick and powerful response to the bull’s early attempt at wining the trend made it appear as if the bears would win the battle decisively. The indices were running deeper into the red.
A little less than an hour into the trading day, that bear advantage has given way to a bull charge. Wait! That bull thrust is faltering! The bears are firmly in control again. Will it be enough to capture the day? Tune in tomorrow … No … Stay tuned in today to see what happens in the Bear/Bull Battle for the Trend.
- The bull market is old and wrinkly but very much alive. The typical warnings signs are simply not in place. The current decline looks nothing more than the usual and healthy bull market 4-8% pullback.
Clearly, the financial media is all over this recent bearish move in the market, and the talking heads are going after the “story” with a negative twist. In fact, it is hard to find those who speak to the issue the way I think about it. The above from Paul Schatz comes as close as any to reflecting my take on the current market. No doubt it, though, the bears are pushing hard to turn the market trend to the downside, but, as is most always the case these days, the bulls are in waiting, sitting back to pounce when the bears run out of steam.
I have been buying strategically as the market has trended down, but now I will wait for the bottom to get the rest of my money in on the way back up. In the meantime, I have been following up on finding trades in Chinese solar market. Do you recall me writing about the information below on Friday?
- China’s energy administration announced today that the country will close 1,725 small-scale coal mines over the course of 2014.
Now, the follow up story states the Chinese government is shifting the coal production from these smaller, less efficient plants to larger, more efficient plants in other parts of China. Fine, but the issue is two-fold, which makes the story deeper, and in that is the opportunity I seek.
China might well be “modernizing” its coal production, but underneath this reality is 1) China has a horrendous and dangerous pollution problem and 2) China generates about 70-80 percent of its electricity from coal. So, where they produce the coal is irrelevant, regarding the pollution issue, as it is irrelevant regarding their dependence on coal for electricity. China’s problem is not where, but how much.
So, I have been pulling down all the ETFs that deal with alternative energy, specifically looking for small Chinese companies that are progressive in solar production. The list so far is not overly huge, but it does require some winnowing.
My thinking is the Chinese government will accelerate its push into solar for two important reasons. The first and most obvious reason is to cut coal production, but the second implied reason is that with the closure of those plants, jobs are lost. China has the same issue all countries have – of people are not working, then people are unhappy. Solar power production creates jobs and it is green. Wait! News flash!
… The bulls have taken charge again. The indices are all green and the NASDQ is leading the way …
I like that the NASDAQ is finding its way back into favor. It is not likely technology will be out of favor long in this world so bent on technology and with the pace of technological change. Oh … sorry …
Anyway, two companies that are now on my buy list are SOL and YGE. The former I have traded a bit recently, but both have the right direction and the right price for trading. I can see sticking with these trades for some time.
Finally, keep your eye on Nokia. My guess is that when the deal with Microsoft is done, the stock will pop. It is already moving today.
- Nokia has won approval from Chinese competition authorities to sell its mobile phone business to Microsoft Corp without having to change its main technology patent practices.
Trade in the day; Invest in your life …
