On last Friday's ThinkorSwim weekly market wrap, one of the participants said something to the effect: I wouldn't buy anything, not stocks, not bonds, not gold.
I am almost in the same camp, I have a few small positions, but nothing looks compelling. Unfortunately, cash brings next to nothing with many money market funds at zero or close to it. For bonds, TLT is approaching 88, which I think is decent support.
If reports are to believed, gold was manipulated higher mostly by one hedge fund (WSJ link). The unwinding of the position pushed gold lower, so it seems highly likely that putting it on, pushed gold higher. Given the reports (which may or may not be 100% truthful) that hedge fund may have accounted for a decent portion of the 29% up year for gold in 2010.
As for stocks, the rally rolls on. Some are concerned about high frequency trading. Many old-school techniques may now be failing as computers parse every possible pattern, every hour, every day, looking for tiny one cent or even half cent trades. Some say all the Fed money from QE2 is flowing into the stock market.
Sometimes the best thing for a trader to do is to sit and do nothing, as boring as that is. I am tempted to turn towards ever more exotic option trades. The logical mind, says it is better to keep it simple, wait for more clarity, better opportunity. Again, what worked last year may not work this year. With VIX at 16, selling option premium seems like an ever more dangerous game of chicken.
As for seasonality, Feb is a poor month for stocks. Bonds are due for a seasonal low in May. March tends to be a poor month for gold, with June and September often providing much better buying opportunities.
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