Daily Investment Interpretations

March 8, 2010

2010-3-8:  The markets closed flat for the day. The NASDAQ Composite was up 5.86 points, (0.25%) to close at 2,332.21, which is a new high after its 3/9/2009 low, the Dow fell 13.68 points (-0.13%) to close at 10,552.52, and the S&P 500 retrenched 0.2 points (-0.02%) to close at 1,138.50. Oil closed up at $81.75 a barrel. Gold dropped to $1,125. The VIX was up (a good sign) 0.37 to 17.79.
    In the commodities arena: Why the crystal ball is clouded.
    This article, Playing Year 2 of the bull market, notes that the second year of a bull market generally echoes the first. "Since 1949, Stovall said, small-caps have returned 22% on average in the second year of a rally, while large-caps rose 15%. Year Two's best sectors have been cyclical plays: consumer discretionary, financials, technology, and industrials." The article observes that the average lifespan for a cyclical bull market within a secular bear market (like the 1966-1982 super-bear market) is 17 months. (Seventeen months from March, 2009, will arrive in August, 2010.) The article also mentions that some emerging markets (China? Brazil?) are in secular bull markets. My investment advisory service warns that earnings are being overstated, and, given that we're in a secular (2000 - 2016?) secular bear market, we'll experience lower lows before the next secular bull market begins, but for now, the sort-term and intermediate-term trends are up.
    Arends: GE has been a disaster under Jeff Immelt
    Chuck Jaffe: Beware of numbers games  Mr. Jaffe is warning about mutual fund managers claiming great annual gains for their mutual funds without mentioning that longer-term, they're down.
    Don't follow the fad, say Callaway and Hulbert (video)