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In Tough Trading Times, First Solar, Celsion Doing Well


Some speculative-type stocks have been doing pretty well, but unfortunately, that momentum has yet to spread out into other areas.


Patience is power. Patience is not an absence of action; rather it is "timing." It waits on the right time to act, for the right principles, and in the right way.
--Fulton J. Sheen

We're well into December already, and I'm sure that everyone is well aware that the "Overused Buzzword" debate continues to rage on. I'm no political analyst, so I'm not going to pretend that I have any special insight into the issue, but I will say that it's influenced the market action, and the uncertainty surrounding the you-know-what aligns well with a muddled technical picture in the stock market. On the one hand, we've had a pretty good move off November lows, the major indices have been able to carve out short-term rising channels, and both the Dow (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) have regained their respective 50-day moving averages. However, each has been turned back from important lateral resistance several times recently. In particular, the S&P 500 was rejected from the 1428-38 zone three days in a row this week, and that area just happens to be where the index broke to multi-year highs back in September and saw some support at the beginning of October. Overall, what we have is a pretty good oversold bounce, but little real technical damage has been repaired.

On the one hand, the lack of any deal has likely prevented the bulls from gaining more traction, but on the other hand, headline risk cuts both ways. In other words, the prospect for some sort of can-kicking agreement has likely helped to keep the sellers at bay. The bears have been champing at the bit for some further downside, and their rumblings have grown louder by the day. The recent run-up, they say, is setting us up for a sell-the-news reaction to any fiscal cliff deal, especially when you consider the fact that once we get through this current mess, the focus will return to Europe, employment, China, worrisome economic data, and of course, earnings.

Their skepticism is certainly understandable, but the bulls have enjoyed some positive tailwinds lately, including positive seasonality and some good old-fashioned performance anxiety. Funds have generally underperformed this year, so there's some pressure to try to make up some ground before the end of the year. Meanwhile, not only is December a historically solid month for stocks, but lackluster performance during the first weeks of November before Thanksgiving has presaged strength between Dec. 6 and Jan. 6. In particular, when the S&P 500 returns between -6% and +1% ahead of Thanksgiving (the SPX lost 0.21% during that timeframe), the index is 18-0 for an average gain of 3.6% during the Christmas period.

As such, my firm has been leaning towards the long side of the equation, but it's definitely been a tough slog from a trading perspective. There have been some speculative type stocks that have been doing well, including First Solar (NASDAQ:FSLR), Celsion Corp (NASDAQ:CLSN), and Ruckus Wireless (NYSE:RKUS), but that momentum has yet to spread out into other areas, and outside of (NYSE:CRM), there certainly hasn't been much by way of any real leadership lately.

All we can really do at this point is understand the dynamics at work and have a plan in place to respond as the broader technical picture unfolds. We'd love to get some more capital to work, but the opportunities have been limited to say the least. The muddled broader picture right now means that we need to make sure we're not forcing things too much and that we're practicing the most important of skills when it comes to this market: patience.
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No positions in stocks mentioned.
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