Though I can still find individual stocks that sell for attractive valuations based on p/e or price to free cash flow, the widespread pessimism and oversold nature of the stock market a couple of months ago have been reversed after one of the strongest months for the stock market on record.
Two recent indicators now signal caution at least. The put/call ratio for the S & P 500 has fallen sharply, indicating growing optimism. Also, a key survey of individual investors--the American Association of Individual Investors--shows nearly twice as many bullish respondents as bearish ones. This is almost a complete reversal from a couple of months ago.
So while I continue to encourage the purchase of selected individual stocks that meet strict quality and valuation criteria, I have a neutral position on the stock market overall.
Steve Lehman
LehmanInvest.blogspot.com/
S & P 500: 1264
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