May 4, 2009
The markets staged an upside breakout today. The NASDAQ
ended up 44.36
the Dow piled
and the S&P
to 907. Oil rose
rose to $902.20.
The VIX fell 0.77
There are several bearish articles tonight which, from
a contrarian standpoint, should be bullish for stocks: 'Smart money' starts to bail on stocks' rally,
Buy and hold is dead,
Shorting may be the best option for some traders,
and from Peter Brimelow, 'Fighting
for its life'.
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
I'm buying individual equities on pullbacks in those
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).