Daily Investment Interpretations

May 4, 2009

2009-5-4:  The markets staged an upside breakout today. The NASDAQ Composite ended up 44.36 (2.58%) at 1,764, the Dow piled on 214.33 (2.61%) to 8,427, and the S&P 500 was incremented 29.72 (3.39%) to 907. Oil rose $1.62 to $54.42, while gold rose to $902.20. The VIX fell 0.77 to 34.53.
    There are several bearish articles tonight which, from a contrarian standpoint, should be bullish for stocks: 'Smart money' starts to bail on stocks' rallyBuy and hold is deadShorting may be the best option for some traders, and from Peter Brimelow, 'Fighting for its life'.   

5-4 (Noon):  The markets have obviously done what the majority expected them not to do: break out higher. Many investors have been looking for a pullback so that they can "buy on the dip". My investment advisory service this morning says that institutions are now buying rather than risk being left behind. The service is going with the flow, but mentions that the markets are now very overbought. Still, pullbacks may be short and shallow, with institutions seeking to expand their holdings.
    I'm buying individual equities on pullbacks in those equities. 
    Green energy stocks and funds such as the Powershares Wilderhill Green Energy Fund (PBW), the Chinese solar tech powerhouse, Suntech (STP), and the world's leading producer of wind turbines, Danish purveyor Vestas Wind Systems (VWSYF), are galloping higher even as we watch, in anticipation of U. S. green power initiatives. (Their jump began at the close on Friday.) Other recommended stock in this category are U. S.-based First Solar (FSLR), Sunpower (SPWR) and Evergreen Solar (ESLR).