Cabot Market Letter is the bull described in Peter Brimelow’s December 5 column, “Bears unbudged by big bounce: Bear cites volatility, while bull wary of whipsaws.”
Excerpt from MarketWatch
Bears unbudged by big bounce
Commentary: Bear cites volatility, while bull wary of whipsaws
By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch)—Stock surge 7% on the week, but the bears are unbudged...
My brave bull, Cabot Market Letter, has a strong long-term record and has been particularly successful in riding the rally following the Crash of 2008. (See Aug. 15 column.)
But Cabot went to 73% in cash last week, conceding “more patience is needed.”
This week’s rally turned Cabot’s medium-term indicator bullish. But Editor Michael Cintolo writes frankly: “These trend-following indicators have not been particularly useful in the recent bottoming phase, which has been characterized by high-volatility whipsaws.”
Cintolo says Cabot is still “holding a cash position of 73%. We’re thinking that amount is too high, but at the same time, after months of whipsaw action, we’re not eager to throw more money into the market’s meat grinder. While some selective buying is OK in resilient names, cash and patience is the recipe for the moment.”
“You should remain defensive for now, but continue to keep your eyes open. Following a fear-filled dip during the past couple of weeks, this week’s strength is very encouraging, and might just mark the start of a sustained move.”
Cabot continues to recommend three buys:
Cabot Oil & Gas Corp. (COG)
GNC Holdings Inc. (GNC)
Under Armour Inc. (UA)
Link to full story on MarketWatch: http://www.marketwatch.com/story/bears-unbudged-by-big-bounce-2011-12-05?siteid=nbkh