Daily Investment Interpretations
July 27, 2009
Right on schedule, in the last few minutes of the trading day, heavy
buying drove the indices into positive territory.
The NASDAQ Composite rose 7.64 points (0.1%) to 1,967.65, the Dow gained 15.27 points (0.17%) to close at 9,108.51, and the S&P 500 added 2.92 points (0.3%) to end at 982.18 ... 18 points shy of 1,000. Oil ended the day up at $68.32.4 a barrel, while gold ended at $956. The VIX climbed 1.19 to 24.28.
My technical advisory service is observing that the fact that the NASDAQ has risen so far so fast doesn't mean, as we might suppose, that it's ripe for a correction. On the contrary, the most likely move ahead is still up. At the same time, the markets are very overbought short-term, and somewhat overbought intermediate-term.
I find myself wondering now that we're essentially sure that the economy is going to bottom in the third quarter and begin a slow recovery, isn't this already priced into the markets? How much farther will the markets rise before there's a major correction? ("Buy on the rumor; sell on the news.")