Daily Investment Interpretations

June 1, 2009

2009-6-1:  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 NASDAQ Composite gained 54.35 points (3.06%) to 1,828.68, the Dow climbed 221.11 points (2.6%) to 8,721.44, and the S&P 500 rose 23.73 points (2.58%) to close at 942.87. Oil leaped to $68.35 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.