Daily Investment Interpretations

May 4, 2010

2010-5-4:  In spite of the fact that there was good economic news today: April likely to show on-track consumer recovery , the markets have crashed:  U.S. stocks down sharply as world troubles weigh, Ugly day on Street, and Spain, Portugal CDS spreads climb further   
 . The NASDAQ Composite dove
74.49 points (-2.98%98%) gain to close at 2,424.25, the Dow plummeted 222.19 points (-1.99%)99%) to 11,929.64, and the S&P 500 free-fell 28.66 points (-2.38%2.38%) to end the day at 1,173.60. Oil dropped $3.49 to $82.68 a barrel, while Gold fell $10 to close at $1,174. The VIX jumped 4 to .
My investment advisory service sent out a "
sell" signal to its subscribers just before today's close. If you failed to sell today, you can probably do about as well selling tomorrow morning.
    Tonight, after the markets closed, the China and Emerging markets Report sent a special bulletin observing that the Halter (Chinese) Index has punched below its 50-day moving average. The Report recommends selling a portion of the portfolio but holding onto the rest of it.
    These "buys" and "sells" are rule-based, and don't depend upon soul-searching, seat-of-the-pants decisions. They can be wrong, but they're designed to prevent major carnage.
Paul Farrell writes: The Goldman conspiracy, and Mark Hulbert observes that High level of bullishness greases skids of correction .
Two downbeat articles were: A retail recovery could be short-lived , and Pimco's El-Erian: Greek crisis is not over.
    Michael Ashbaugh comments that U.S. markets threaten technical shift: Ashbaugh.
    Market futures are down slightly tonight.  

2010-5-4 (Just Before the Close):  SELL!  My investment advisory service, correct 80% of the time, has just issued a "Sell!" signal (the first since early this year).

-4 (Late Morning):
  The Dow and the S&P 500 have both broken below their 25-day moving averages, and are flirting with their 50-day moving averages. Any further deterioration will lead to a "sell" signal. The current malaise is coming from fears that the member countries of the European Union won't approve the bailout package that has been crafted to save Greece from default, and a threat of a downgrading of Spain's debt.
    Stay tuned.