TEVA

Bought March calls at open. Look at monthly chart fantastic looking. Will be buying Jan 2011 calls on any pullbacks.

Dow theory buy signal redux

I posted quit a while back about a DJI theory buy signal. Well the DJI took out its Jan 6 high and closed above that dates close as well. Now we need the transports to confirm and when/if it does I would suspect a pullback is in order as a lot of fuel and energy has been spent. The bull case will be made and it will take a few months to energize the markets, but once that is complete its on.
On the other hand we could get a glaring non confirmation and that would be the final nail in the coffin. I suspect they would try and keep prices high while they distribute the shares to the retailers, before everyone heads for the exit at the same time.

Diversification

I was emailing with a reader about diversification and I thought I should share my view on the matter.
I would not diversify just for the sake of being diversified. The only people it benefits is your money manager, it makes his/her MUM higher. (money under management)
Why let your money sit in a asset class that is dead or broken. The point is to make your money work smarter, so you dont have to work harder.
Now if you end up being diversified because your buying solid company's at discounts, because the market is willing to give them to you at discounts, then that is acceptable. However one must not get complacent and let your diversification take your eye off the ball.
That is how I approach my investments.