According to Mitchell Clark, contributor to Profit Confidential, a lot of smaller companies and micro-cap stocks are now reporting their quarterly earnings, and a lot of the numbers are pretty good; however, Clark expects the stock market will consolidate for the rest of this month.
“Trading volume is pretty lackluster and so are expectations,” notes Clark. “A lot of U.S.-listed Chinese micro-cap stocks are hitting new 52-week lows right now.”
In the article “Broader Market to Consolidate—No More Upside Without the Fed,” Clark notes that trading action in today’s stock market is only about institutions, and that’s why any micro-cap stocks being considered need to have what institutions are looking for if investors want any chance of getting a decent return on their investment.
“The story has to be good, but so does the liquidity,” says the Profit Confidential contributor.
Clark thinks that institutional investors have basically abandoned the group due to accountability problems.
“Right now, I don’t see the need for stock market speculators to be taking much action,” he says. “I wouldn’t be buying the stock market’s leading large-caps unless they correct in price, and I would be highly selective among any micro-cap stocks.”
Clark claims that without the Federal Reserve, the stock market hasn’t any more legs, given the earnings outlook.
“The good news is that the stock market’s valuation is reasonable, and this tempers the immediate downside,” concludes Clark. “Right now, the stock market is trading where it should. There’s no definable trend and, therefore, no need to take any bold action.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.