Daily Investment Interpretations

October 14, 2009

2009-10-14:  Today was the day that the Dow broke 10,000 (10 years after its first penetration of the 2000 mark). The NASDAQ Composite rose 32.34 points, (1.51%) to end at 2,172.23, the Dow galloped 144.8 points (1.47%) to finish at 10,015.86, and the S&P 500 trotted 18.83 points (1.75%) to 1,092.02. Oil ended up at $75.82 a barrel, while gold remained unchanged at $1,065. The VIX fell 0.13 to 22.86.
J. P. Morgan and retail sales exceeded analysts' expectations.
    Typically, when the Dow crosses a new line in the sand, it's followed by a pullback. The markets may have risen far enough to warrant another dip, but typically, this is preceded by a few days of topping before the markets roll over and tumble back down.
    Tonight, the S&P 500 is up 63.7% from its March low. The greater part of its rise is probably behind it. (A 42% increase from here would put it back at its October, 2007, peak.) At the same time, as a cyclical bull market in an ongoing secular bear market, it could turn tail at any time.
    The Chinese Halter Index is now well above its 26-day and 50-day moving averages. For what it's worth, the Halter Index is still about 40% below its (frothy) 2007 peak. And of course, the Chinese economy has been growing over the past two years.