Daily Investment Interpretations

May 24, 2010

2010-5-24:  TopStock Portfolios did indeed issue a "buy" signal this morning, and I bought. Fortunately, I didn't have an opportunity to pass on that "buy" signal here on the website, and it's a good thing. In the last 15 minutes of trading, the indices fell almost as much today as they rose on Friday. Earlier this afternoon, when the Russell 2000 ETF "UWM" fell to the breakeven point, I sold all my shares, so I didn't participate in this afternoon's losses. Otherwise, I would have lost more than 1% of my investment. (Unfortunately, that will tie up most of my liquid cash for the next three trading days, until the trade "settles".) So much for the "doozy of a bounce", at least for today.
    The NASDAQ Composite lost
15.49 points (-0.69%) to 2,213.55, the Dow dropped 126.82 points (-1.24%) to close at 10,066.57: Wall Street's dive deepens, and the S&P 500 fell 14.04 points (-1.29%) to end at 1,073.65: Bears chase global stocks into correction. Oil remained essentially unchanged at  $70.03 a barrel, while Gold rose $16 to $1,193. The VIX fell 1.78 to 38.32. 
    Worries about Europe weighed on the markets today. Spain had to rescue one of its banks today, leading to concerns that other banks might need similar interventions: U.S. stocks end sharply down amid European worries. David Marsh warns that Europe must stick together: Europe's choice: chaos or solidarity., 
    Where are the markets headed? Here are five commentaries: Stephen: Shanghai tips Wall Street's future, Three skunks say market still stinks (Peter Brimelow), End of correction nears - but respite won't last, 7 worries for Wall Street, and Market Medics: 'Summer bummer ' looms.
    The first of these articles offers the interesting observation that since 2007, the Shanghai marketplace has become a leading indicator for the U. S. markets. Right now, the Shanghai markets are down about 19% compared with 10%-12% for the U. S. market indices.
    In the second article, written by Peter Brimelow, three investment advisors who have done well during the current downturn are 100% in cash. One of them thinks that U. S. market indices will advance during the next few weeks, and then will resume their "death spiral".
    The remaining articles sound the same cautionary note: a bounce, followed by further declines. There's some talk of a "W"-shaped recession.
    Stock market futures are down about 1% tonight. (Of course, anything can happen between tonight and tomorrow afternoon's close.)