Daily Investment Interpretations

January 25, 2010

2010-1-25:  The markets rose modestly today. Whether this marks a bottom or is merely a dead-cat bounce remains to be seen. The NASDAQ Composite gained an exiguous 5.51 points, (0.25%) to close at 2,210.80, the Dow climbed a paltry 23.88 points (0.23%) to close at 10,196.86, and the S&P 500 rose 5.02 points (0.46%) to 1,096.78. Oil ended the day at $75.12 a barrel. Gold ended at $1,096. The VIX fell 1.9 to 25.41.
    I'm retaining the paragraph below from last Friday's commentary because it's probably worth repeating.
    "The markets are certainly overdue for a 10%-or-greater correction: Correction long overdue (video). However, this is happening with extreme rapidity (as shown in the charts below), although the magnitudes of the daily moves don't match those of the panicky October of 2008. This article: Earnings only part of story, explains that although earnings are rising, revenues aren't  The earnings are coming from cost-cutting, etc., and don't reflect a reviving consumer economy.
    "On the other hand, the World Fund announced on Wednesday that the worst of the financial crisis has passed: Where will the next crisis hit?. 
    "I'm more than 50% in cash, and I may hedge my remaining long positions by buying a double-inverse index Exchange-Traded Fund on Monday."
    One reason given for Friday's stock swoon was the report that Fed Chairman Ben Bernanke's reappointment was in question. Wall Street sent a strong message to Congress that they don't want the Fed to be held hostage to the November elections.
    After-hours earnings and revenue reports from Apple and Texas Instruments have shown strong gains from a year ago.
    Perma-bear Jeremy Gratham warns that Investors face new stock-market bubble: Grantham.