This has become a very difficult market to understand and therefore to make money.
It appears half of the investors are very bullish right now despite all these adversities such as fiscal cliff, Italian election, sequester. Even Marc Farber, one of the Doom and Gloom gurus, had now changed his view and said he believed the market would stay on the top for a while. On the other side, some hedge fund managers and investors such as Soro are now sitting on a pile of cash, watching on the side line. That is truly a very interesting scene and makes this market both difficult and risky to trade. I have seen more and more stocks, even blue chips such as AAPL rose and fell sharply. One of the REITs, UPL, rose some 7% the other day and I could not find any reasons for such a sharp rise. CWH rose 50% recently. I saw even IAG rose almost 5% today. Making it almost like gambling in the casino or in a horse race, if you bet on the right stock and it shoots up, sell it and keep your profit or it will vaporize fast. CWH started tanking right now. DCIX, a container shipping company, rose sharply lately and started tanking big time today. The market has lately become more and more like a casino, IMHO.
I cannot find that many stocks that are still undervalued to buy and hold, yet the market continues to rise. Very puzzling. I guess you surely cannot fight the FED and those large hedge funds. Now many predict that the market will not tank till early next year. I do not believe any one really knows.
Watching financial (XLF) and transportation (IYT) closely, if these continue to make new highs like they had been doing recently, there are still some legs left on this rally, when they stuttered and started tanking, watch out, the market correction will be here. 10y interest rate already crept back up.