The market is up from 10 to 15% since July lows, depending on which index you follow. Such a strong move to the upside warrants caution as we approach the end of the year when hedge funds, mutual funds and individual investors try to secure their numbers for the year and adjust their positions for taxation.
The last 3 years have seen intensive selling in the first few months as momentum stocks have been brought down to earth. As such, I recommend you close out positions in any of the stocks that are extended well beyond their support levels.
I am expecting a weak first couple of months in 2007 and believe that the times ahead call for caution.
-- Faisal Laljee