This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Market Preview: Easy Money Made

Updated from 7:04 p.m. ET to include additional information about after-hours action, Family Dollar's quarterly report.

NEW YORK ( TheStreet) -- It seems bulls and bears alike would welcome a pullback at this point.

A little slippage in consumer confidence tripped up U.S. stocks on Tuesday but it's hard to complain about such polite selling after Monday's strong rally.

Still, as winter gives way to spring, the inevitable comparisons with last year's market action are cropping up. While 2011 didn't start out as well as 2012 has, the similarities are undeniable. Sameer Samana, international investment strategist at Wells Fargo, listed a few in commentary released after market close, most notably the winding down of QE2 in 2011 vs. Operation Twist this year and the low volatility trading environment.

"All these factors give us a sense of déjà vu, as the current rally has barely paused within its uptrend," Samana wrote. "This suggests an environment where, in the short term, the easy money has probably been made and the bulk of the rally is probably behind us. We this as an opportunity for traders to trim positions and take profits. As the market works off its overbought condition, we believe a better opportunity to increase equity exposure will present itself."

Binky Chadha, chief global strategist at Deutsche Bank, is also of the mind that stocks need to go down some before making another move higher. He said Tuesday that stocks are likely due for a 3-5% decline "but also a significant further rally."

"The magnitude, breadth and duration of the rally across risk assets and the corresponding collapse in volatility have taken market participants by surprise," he wrote. "Many observers have expressed concerns that it represents a quick reversion to complacency, yet another manifestation of the bipolar risk-on/risk-off behavior typical of the last few years."

Federal Reserve Chairman Ben Bernanke juiced stocks on Monday by hinting that more stimulus may be necessary to combat the problem of long-term unemployment but there's still plenty of skepticism out there that QE3 will come to pass, so it's just prudent to prep a portfolio for what happens when/if the risk-on trade ends.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SPY $206.16 -0.87%
FDO $0.00 0.00%
ZZ $2.19 0.00%
AAPL $95.18 1.64%
RHT $72.35 -2.70%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs