Daily Investment Interpretations

September 24, 2010

2010-9-24 (Friday Night: The markets advanced again today, for a fourth straight week of rising prices.  The NASDAQ Composite racked up a gain of 54.14 points (2.33%) to 2,381.22 The Dow posted a triple-digit gain of 197.84 points (1.86%) to close  at 10,860.26, and the S&P 500 eased up 23.84 points (2.12%) to end at 1,148.67. Oil slid to $76.50 a barrel, while Gold closed at $1,298. The VIX slid to 21.71
    Most importantly, the markets seem to have broken (up) out of their four-month trading ranges (especially the NASDAQ Composite--see below). It may be time for an aggressive purchasing program. We'll see next week.
    Mark Hulbert tests the idea that stock markets quit rising once the national Bureau of Economic Research announces that a recession has ended: Buy on the rumor, sell on the news?. He concludes that this isn't the case. Two-thirds of the time, they're higher a year later.
    

2010-9
-24 (Friday Morning... Later)
: My technical advisory service is still cautious, although the market has hit a new "trading range high" this morning. The advice is to buy starter positions (žth to ⅓rd of a full position) on pullbacks. (There may be closing of shorts boosting the markets today, so this isn't yet "stampede time".)

2010-9
-24 (Friday Morning)
: Breakout or "fakeout"? It looks to me as though the markets are breaking out to the upside. Michael Ashbaugh seems to agree: Summer of our discontent. If so, it will be time to "pile on". (My technical advisory service still hasn't given a fervent "buy" signal, although that could come at any time.) At the same time, the markets will climb "walls of worry", so there may be slight pullbacks that offer "buy-in" points.