The market has come under pressure yet again this week, and in the short-term, it is looking like the major indexes and many of the old leaders (which we wrote about on page 5 of the last Letter) want to move lower. However, we can’t say the big picture has changed—the market remains in a wide, choppy trading range, as do most stocks. We continue to think the peak of selling pressures in the broad market were in August and October, but it’s imperative to remain defensive until the bulls show a willingness to buy stocks for more than a week or two. Our Model Portfolio continues to hold a huge cash position, which has helped us avoid some of the damage of recent days. We’re not opposed to adding a new stock or two if we see an enticing set-up, but the main goal is to stay patient and wait for a sustained uptrend. In tonight’s Letter, we write about our three remaining stocks and the market, of course, but also touch on a few of our favorite recent new issues on page 5. New issues often provide new leadership if and when the market turns bullish, so keeping an eye on these could allow you to eventually get in early once the clouds part.
