May 29, 2009
The indices climbed again today, ostensibly on advancing commodity prices,
with most of the day's gains coming in the last half hour of trading.. The
8,500.33, and the S&P 500 rose 12.31
to close at 919.14. Oil leaped
a barrel, approaching the $70-a-barrel target that OPEC has sought, and
that OPEC feels won't choke off a global recovery, while gold
was vaulted to $980.
The VIX dropped below 30 to 28.92.
I updated the Alternative
Energy Investments section yesterday.
Right now, the bulls and the bears are duking it out to
see which will win out when this market breaks out of its trading range.
The markets have worked their way out of their overbought status and even
sentiment, while bullish, isn't at the extremes it was at a month ago. In
an interview today, mutual fund impresario Mario Gabelli expressed his
belief that the markets will rise into next year: Mario Gabelli takes the long-term view.
He observed that there are several worrisome financial conditions that
will permit the indices to climb "a wall of worry" over the next
year. And here are interesting quantitative articles from Minyanville's
James Kostohryz: Countertrend rally can't be stopped,
and Your S&P Roadmap.
He concludes that 1,100 is probably the upper turning point for this
countertrend rally, although, under certain circumstances, it could reach
the 1,350 upper bound of its trend channel. Since it has closed at about
919 tonight, that would give it an appreciation potential of about 20%
more from here. However, the greater part of its move (from 667 to 919)
has already taken place.