Daily Investment Interpretations

December 13, 2010

2010-12-13 (Monday Night): The markets closed mixed today after a dramatic last-minute sell-off: Wall Street closes higher. The NASDAQ Composite fell 12.63 points (-0.48%) to 2,624.91. The Dow rose 18.24 points (0.16%) to close at 11,428.56, and the S&P 500 added  0.06 points (0.0%) to close at a new 2010 high: 1,240.46. Oil slipped up to $88.21 a barrel, and Gold ended at $1,394. The VIX rose 0.06 to 17.55.
    Investor sentiment has gotten bullish to the point of frothy. The  markets are ripe for a short-term reversal  After 7 up days and one down days, and after rising 60 points in 8 trading days, the markets are due for a break.  After all, everyone knows that the markets are going to stage a year-end rally--which leads me to expect at least a short, sharp dip in the indices between now and the end of the month to shake up the professional investors.
    Blue chips at bull-era best  This article says that if the Dow can close above 11,451.57... which it didn't quite manage today... then we're back in a bull market.
    Party season  Peter Brimelow quotes the Aden sisters who write that over the next few weeks, a bull market is in the cards, but some time in the next few years, the U. S. stock market is going to crash because of the mountain of dept and of cheap money that's out there.
    Welcome back, bull market  This article, by Jon Markman, says that fad investing is back, and suggests following the fads while they run their courses, but when the clock strikes midnight, do not delay your exit.
What to do right now:
    Right now is probably a time to be fully invested, and I'm having trouble settling on an investment program. My investment strategy is changing daily as I make new discoveries about my plans. For example, the idea of investing in deep-in-the-money, 2013, calls on emerging market ETFs and rolling them over each year is probably a profitable long-term strategy, but right now, with soaring inflation and rising interest rates, these emerging markets may stand a better chance of falling over the next few months or the next year than they do of rising further. In the meantime, the U. S. markets may be the place to be for the next year or two. And as my strategy du jour, I'm investing in the 2X-leveraged Proshares Ultra Midcap 400 ETF, MVV.and in the Direxion Daily Small Cap Bull 2X ETF, TNA.