June 1, 2009
The indices vaulted out of their trading ranges today, ostensibly on advancing commodity prices,
with most of the day's gains coming in the first hour of trading.. The
8,721.44, and the S&P 500 rose 23.73
to close at 942.87. 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 unchanged for the day at $980.
The VIX came back up to 30 (29.99).
So what to do now?
It was important to see whether today's gains would be
retained at the markets' close. They were. Now there are two choices:
buy into the rally, or wait for a (modest) pullback. What to buy? I bought
100 shares of the solar power ETF TAN today, and 100 shares of the wind
power ETF FAN. I'm hoping for a modest pullback, at which time I'll add to
my positions. I'll also expand my ownership of the Powershares Wilderhill
Green Energy ETF, PBW. In addition, I think that it's time to for some
risk-taking, betting on a market that treads higher.
It's important to repeat: we're in a secular bear
market. In general, a buy-and-hold strategy won't work (although I think
you can profitably buy and hold alternate energy and global warming
beneficiaries).. The S&P is still down 40% from its October, 2007,
high, so buying now is still a good bet.