Daily Investment
Interpretations Archive
January 1, 2009, to June 30,
2009
July
1, 2008, to December 31, 2008
May
7, 2008, to June 30, 2008
2009-6-30:
The indices fell somewhat today, and my normally optimistic advisory
service was pretty pessimistic this morning. The principal news driving
this seems to be the fact that consumer sentiment dropped below 50% this
month, after rising above 50% last month. The continuing layoffs are
spooking consumers.
An updated jobs report will come on Thursday.
The NASDAQ
Composite ended the day down
9.02
points
(-0.42%)
to 1,835.04, the Dow
lost
82.38
points
(-0.97%)
to
close at 8,447.00, and the S&P 500 divested
itself of 7.91
points (-0.85)
to end the day at 919.32
Oil
fell
to $70.46
a barrel, while gold
dropped
$13 to
927.
Apparently, the recovery is back on. the VIX
added 1.00
to 26.35.
Michael Ashbaugh writes, S&P reclaims 900 mark.
He thinks Thursday's job report may set the tone. In the meantime, during
a holiday-shortened week, there's not a lot going on.
Estimating the Market's Rise in an Anemic
Recovery
Supposing the economy recovers to a new, lower norm
than its 2007 level. How high would that be from here?
Presumably, GDP--and therefore, earnings--will be
several percent lower than they were in 2007, at least until GDP growth
can catch up with the 2007 levels. So presumably, earnings, after
correcting for inflation, will plateau several percent below their 2007
levels. But they won't settle at a level 40% below their 2007 measures. In
fact, in a year or two, I would expect them to level out a few percent
below their 2007 highs, rising to their 2007 values in another year or
two. But this means that the stock market may approach 2007 levels within
the next two to four years, doesn't it?
2009-6-29:
The indices rose a little today. We're still in the last two days of the
quarter, so that might have some impact upon what's happening. Wednesday
will mark the beginning of a new quarter.
The NASDAQ
Composite ended the day up
5.84
points
(0.32%)
to 1,844.06, the Dow
added
90.99
points
(1.08%)
to
close at 8,529.38, and the S&P 500 tacked oned 8.33
points (0.91%)
to end the day at 927.23
Oil
hopped
up
to $71.50
a barrel, while gold
was
unchanged at
941.
Apparently, the recovery is back on. the VIX
shrank 0.58
to 25.35, which marks another "new" low.
In the meantime, the news is lugubrious, ominous, and
that's good news for the stock market (although the VIX isn't showing much
concern). And here are gloomy stories calculated to cast fear into the
marrow of the optimistic investor.
Why the Golden Cross May Not Be Golden
MV Weather
Report: Does Golden Cross Mean Stormy Skies Ahead?
:Golden Cross" refers to an intersection in which
the 50-day moving average rises up across the 200-day moving average. This
happened last Tuesday, June 23rd. The only problem is that the 200-day
moving average is still declining, so it's not clear that this
"Golden Cross" points to a new bull market, as opposed to a bear
market rally followed by further downside.
My normally optimistic investment advisory service
warns that the S&P 500 may forming a "head-and-shoulders"
pattern typical of market tops.
2009-6-26:
Yesterday's upwelling was triggered by end-of-the-quarter institutional
window-dressing. (Institutional purchases have to be made at least three days
before the end of the quarter.)
The market indices remained near the flat-line today as the
bulls hung on to their gains.
The NASDAQ
Composite ended the day up
8.68
points
(0.47%)
to 1,838.22, the Dow
lost
34.01
points
(-0.4%)
to
close at 8,438.39, and the S&P 500 added 1.36
points (-0.15%)
to end the day at 918.90
Oil
dropped $1.07
to $69.44
a barrel, while gold
climbed
$2 to
941.
Apparently, the recovery is back on. the VIX
shrank 0.43
to 25.93. which marks another "new" low.
Later: The China and Emerging Markets Report is reassured by
the Halter Index' move above its 50-day moving average, and is
recommending a new stock for purchase.
Mark Hulbert notes that sentiment has shifted from bullish to
moderately bearish: Contrarians starting to see green shoots.,
which, from a contrarian standpoint is bullish for the current market rally.
2009-6-25:
"Tomorrow" brought a surprise. The three major indices have
jumped by a little more than 2%, putting them back above their 50-day and
200-day moving averages. I don't have access to the advance-decline
numbers or breadth and volume numbers for the day, and I don't have time
to search for them. Information concerning the significance of today's
moves should be here before the markets open again in the morning.
(Today's surprise move up probably triggered short covering.)
The Cabot China and Emerging Markets Report should be
hitting my inbox within the next hour or two.
The NASDAQ
Composite ended the day up
37.2
points
(2.08%)
to 1,829.54, the Dow
GAINED
172.54
points
(2.08%)
to
close at 8,472.40, and the S&P 500 added 19.32
points (2.14%)
to end the day at 920.26
Oil
dropped
a paltry $1.56
to $70.31
a barrel, while gold
climbed
$5 to
940.
Apparently, the recovery is back on. the VIX
shrank 2.69
to 296.36. which marks a "new" low.
Later: The China and Emerging Markets Report is reassured by
the Halter Index' move above its 50-day moving average, and is
recommending a new stock for purchase.
2009-6-24:
The markets moved up more or less today, but not with any conviction.
The
NASDAQ
Composite ended the day up
27.42
points
(1.55%)
to 1,792.34, the Dow
lost
23.05
points
(-0.28%)
to
close at 8,299.86, and the S&P 500 added 5.84
points (0.65%)
to end the day at 900.94, minutely above its 50-day and 200-day
moving averages
Oil
dropped
a paltry $0.21
to $68.46
a barrel, while gold
climbed
$10 to
934.
In other words, fear of a further economic decline slightly outweighed
optimism, but the VIX
shrank 1.53
to an optimistic 29.05.
We'll see what tomorrow brings.
2009-6-23:
The markets moved sideways today, but yesterday was a 14:1 down day for
the S&P 500, and the market outlook is grim.
The
NASDAQ
Composite ended the day down
1.27
points
(-0.07%)
to 1,764.92
(basically unchanged), the Dow
lost
16.1
points
(-0.19%)
to
close at 8,322.91, and the S&P 500 added 2.06
points (-3.06%)
to end the day at 893.04.
Oil
rose
$1.74
to $68.63
a barrel, while gold
climbed
$3 to
924.
The VIX
shrank 0.59
to 30.58.
This is the second day the Dow and the S&P 500 have closed under their
50-day and 200-day moving averages, while the Nasdaq Composite has
penetrated its 25-day average but is still above its 50-day average. The
short-term (25-day) averages have topped and turned slightly down for the
Dow and the S&P 500, while the 50-day averages have flattened. All
three of my market timing advisors have turned cautious. The next major
resistance comes at S&P = 880. If the bears break through there, it
will probably be time for wholesale selling.
Michael Ashbaugh's Tuesday technical analysis (Down time),
reaffirms that the market broke down yesterday, and the most likely path
is a move lower from here. He mentions that the VIX still signals
remarkable complacency: Fear gauge is on the rise, but not fear itself.
Cabot's China and Emerging Markets Report has just
recommended that we subscribers sell a portion of our holdings.
2009-6-22:
The markets melted down today. The
NASDAQ
Composite backed up
61.38
points
(-3.35%)
to 1,766.19,
the Dow
lost
200.72
points
(-2.35%)
to
close at 8,339.01, and the S&P 500 parted with 29.19
points (-3.06%)
to end the day at 893.04.
Oil
fell
$2.62
to $67.06
a barrel, while gold
dropped
$15 to
921.
The VIX
climbed 3.18
to 31.17.
Today's stock slide seems to have been driven by an
updated forecast by the World Bank that the world's economies will
contract 2.9% this year, up from a forecast three months of a world
economic contraction of 1.7%. Even so, today's fall was eclipsed by a
46-point fall on April 20th.
At 893, the S&P 500 is 7 points below its 50-day
and 200-day moving averages.
2009-6-22
(Noon):
Now that the S&P has fallen below 900, the next "line in the
sand" is at 880.
Cabot's advisory service still sees this as a cyclical
bull market, destined to last some months.
I sold my riskier, 2X and 3X positions this morning,
because these are high-risk bets I made on the market. I'll buy them back,
hopefully at lower levels than where I sold them. But I don't think that
someone else who's holding unleveraged equities needs to sell at this
point, since the intermediate market trend is still up. If the S&P 500
falls below the 900 level and stays there long enough to tilt the 50-day
moving average downward, it may be time to sell, but that hasn't happened
yet. So far, this decline falls within the envelope of typical bull market
corrections. (The fluctuations are getting smaller, suggesting that this
market is scraping along a bottom.)
2009-6-22:
The S&P 500 is kissing its 50-day and its 200-day moving averages,
currently sitting at S&P = 900. I have trimmed my riskier, more
aggressive positions this morning. With the S&P 500 having touched 900
this morning, this pullback has reached significant proportions. My
wonderful market advisory service is watching and waiting for a buying
opportunity.
The market is meeting some resistance at the 900 level.
So far, this pullback is no deeper than the pullback in May, nor have the
25-day and 50-day moving averages tilted downward. So far, the
intermediate trend is still up.
2009-6-19:
The markets spent yet another day in the shallows, with the Nasdaq and the
S&P up modestly, and the Dow down a little.
The
NASDAQ
Composite rose
19.75
points
(1.09%)
to 1,827.47,
the Dow
lost
15.87
points
(-0.19%)
to
close at 8,539.73, and the S&P 500 crept up 2.83
points (0.31%)
to end the day at 921.23.
Oil
fell
$1.82
to $69.40
a barrel, while gold
added
$2 to
936.
The VIX
fell 2.04
to 27.99.
The stock market's relief rally is giving way to market
action that focuses on second-quarter earnings, and on third and fourth
quarter earnings forecasts.
2009-6-18:
Cabot's China and Emerging Markets Report urges buying on this dip, as does my
market technical analysis service. Cabot's position is that this dip is long
overdue: Best-performing
bull bellows bravely. Furthermore, there seems to be a lot more skepticism
and pessimism than was present a few days ago, which seems to me to be a bullish
sign.
The NASDAQ
Composite slipped
0.34
points
(-0.02%)
to
1,807.72,
the Dow
added
58.42
points
(0.69%)
to
8,555.60, and the S&P 500 inched up 7.66
points (0.84%)
to end the day at 918.37.
Oil
oozed
up $71.46
a barrel, while gold
doffed
$1 to
935.
The
VIX fell 0.33
to 31.21.
I highly respect the opinions of Prieur du Plessis and Todd
Harrison, who certainly knows inordinately more about the stock market than I
do. At the same time, I have to choose among advisors with differing advice. My
choice at the moment is slightly in favor of this pullback being a temporary
correction, but the ultimate arbiter will be the actions of the market indices.
The S&P 500 has closed for three days now below its 25-day moving average,
but is still above its 50-day moving average, and is about 5 points above its
200-day moving average. The Chinese index FXI is right at its 25-day moving
average, but it's about 6% above its 50-day moving average.
The crucial point is that stock prices are still relatively
cheap, with the S&P off 40% from its 2007 high, and we're no as longer
worried about the world's economy collapsing.
2009-6-18
(Afternoon):
The markets have risen modestly this morning. The cited reason is that
continuing jobless claims have begun to decline (slightly) and the Philadelphia
Industrial survey has shown the best levels since last September. At the same
time, this good news hasn't caused the markets to go into orbit. Prieur du
Plessis thinks the markets are topping, and will retreat 10% or more from here.
(They might retest their March 9 lows.) My market timing advisory is calling for
caution, but for buying on the dips.
I'll hear from the Cabot China and Emerging Markets Report
later today. (The Chinese index, FXI, is off about twice as much as the S&P
500, as is the emerging markets index, EEM. So much for the decoupling of
markets!)
2009-6-17:
The markets appear to have bottomed today, at least enough to slow their
rate of fall. (Tomorrow is a quadruple options expiration date, so that
might have something to do with what's happening.)
The NASDAQ
Composite added
11.88
points
(0.66%)
to 1,808.06,
the Dow
shaved
7.49
points
(-0.09%)
to
8,497.86, and the S&P 500 declined 1.26
points (-0.14%)
to end the day at 910.82.
As
mentioned above, Oil ended
at $70.96
a barrel, while gold
added
$4 to
936.
The VIX
fell a 1.19
to 31.49.
One factor that could have been weighing on the market
is the government's just-announced new rules for the financial industry.
Basically, though, it's probably time for a correction. This market has
come a long way with no real pullbacks until now.
2009-6-16:
The markets fell again today on relatively low volume, though not as much
as yesterday. The indices each lost roughly 1¼
%.
The S&P 500 and the Dow both closed below their 25-day moving
averages, with the S&P ending at
its 200-day average, and the Dow closing below
its 200-day average. The Nasdaq remained above both those benchmarks.
The NASDAQ
Composite retreated
20.2
points (-1.11%)
to 1,796.18,
the Dow
gave
up 107.46
points
(-1.25%)
to
8,504.67, and the S&P 500 declined 11.75
points (-1.27%)
to end the day at 923.72.
As
mentioned above, Oil ended
at $70.27
a barrel, while gold
added
$5 to
932.
The VIX
jumped 1.87
to 32.68.
The market fell sharply in the last 15 minutes of
trading, suggesting to me that investors waited to see whether the market
would rise at the end. When it didn't they dumped stocks in anticipation
of further losses to come. Of course, after losing 3¾ % in two days, the
market will probably soon stage a "dead cat" bounce, but right
now, its short-term trend is down. U.S. stocks forfeit rise; economy at issue
This is the first two-day pullback since the end of
March, and it's certainly overdue.
As the market worsens, Paul Krugman's insights look
better and better. In a set of three lectures that he gave last week in
the UK, he explains that economists had thought until now that depressions
couldn't happen here again. Economists had learned their lessons,
and by now, had everything under control. Monetary manipulation would
always pull the economy out of a funk. Demand could be taken for granted;
the limiting factor would always be monetary supply. It's intuitive that
you can always get people to spend if you print enough money and make it
easy enough to borrow.
Until they don't.
The key to this was what happened to Japan during its
"lost decade". During the 90's, Japan printed money by the
bushel basket, but it didn't pump up the economy, nor did it cause the
inflation that everyone "knew" would have to happen. Instead,
the money sat in bank vaults because (1) no one wanted to borrow money to
expand their businesses because business wasn't that good, and (2) banks
were afraid to loan money to most borrowers because they weren't sure that
the borrowers could pay them back. The Japanese lowered their interest
rates to zero, and nearly doubled their money supply and it did nothing.
It generated no lending and no inflation. The Japanese economy continued
to stagnate. And this flies in the face of all existing economic theory.
All our economic texts will have to be rewritten. The models have failed.
The bottom line: we're in unexplored territory, in a
"liquidity trap". This is a situation in which the interest
rates that banks have to pay to borrow money is zero. They can loan out
this money at a 5% or 6% interest rate but (1) potential borrowers are too
insecure about their own financial futures to want to borrow, (2) consumer
demand has fallen off so companies are closing plants rather than building
them, and (3) banks are afraid that borrowers won't be able to repay their
loans, understanding that it takes a lot of interest to make up for
every defaulted loan. Consumer demand declines so companies lay off
employees, resulting in further declines in demand.
Breaking this vicious circle requires either waiting
until durable goods wear out and must be replaced, forcing renewed
production (as in the Panic of 1873), or the government steps in to become
the employer of last resort. During the Great Depression, government
intervention led to a dramatic rebound (the stock market quintupled) from
January, 1933, through January, 1937, until President Roosevelt, in the
wake of his 1936 re-election, gave in to the deficit hawks and cut back on
the New Deal. It was too soon. The country plunged back into recession
until World War II broke it up.
A Parenthetical Remark: It's a popular pastime to bemoan the money
the government is borrowing as a debt that we'll pass on to future
generations. In fact, about a third of the money that the government is
borrowing for TARP and for the government's fiscal stimulus program will
come back in the form of taxes as the money changes hands in the economy.
Further, this money isn't being given away but is being loaned against
tangible assets. Hopefully, part of the two-thirds of this money that
doesn't return to the government through taxation should be recovered when
the loans are repaid, as has happened in the past. Then, too, recessions
and depressions reduce government tax receipts (currently about $3
trillion a year). Decreasing the lengths and depths of recessions may help
offset the costs of stimulus programs. And finally, the infrastructure
investments the U. S. government made at least during the Depression...
roads, dams, power plants... were of lasting monetary value to the nation,
and were purchased at rock-bottom prices.
2009-6-16
(Afternoon):
The markets have continued to drop today, with the S&P 500 falling
below its 25-day moving average. Its 25-day average is flattening out, but
hasn't yet sloped downward. I have taken the precautionary step of selling
my January, 2010, calls, and have sold some previously recommended,
outperforming China stocks that are no longer followed by the Cabot China
and Emerging Markets Report. Now, with the highest-risk stocks no longer
in my portfolio, I'll wait to see what happens next. (This still leaves me
75% invested.)
Note that the Chinese market index, FXI, is down 2½ %
at the moment..
Flip-flopping moving averages point to momentum
See Michael Ashbaugh's Technical Indicator
2009-6-15:
The markets certainly took a drubbing today. The NASDAQ
Composite retreated
42.42
points
(-2.28%)
to
1,816.38,
the Dow
gave
up 187.13
points
(-2.13%)
to
8,612.13, and the S&P 500 declined 22.49
points (-2.38%)
to end the day at 923.72.
As
mentioned above, Oil fell
0.45
to $70.17
a barrel, while gold
dropped
$13 to
928.
The
VIX jumped 2.36
to 30.81.
The S&P 500 is still above its 25-day moving average, but
only just. And the 25-day moving average appears to be sloping over to form a
short-term top. Ugly
Day on Low Volume: More Froth To Be Wrung Out of Market? One factor to
consider: Treasury Secretary Geithner set forth new reforms today: U.S.
financial regulation reforms outlined, and warned that further travail lies
ahead. (I note, though, that deficit hawks are calling for an end to fiscal
stimulus and to zero interest rates because of the "threat" of
inflation. Mr. Geithner's remarks could be aimed at the deficit hawks.)
Paul Krugman has posted this tonight: Permanent
Link to Unemployment claims and employment change.
This is the long-awaited pullback: Funds
look to pullback to get in stocks.
If the S&P 500 doesn't turn around and start back up
tomorrow, I'll begin lightening up, based upon its 25-day moving average. I
won't sell out unless its 50-day moving average turns down, but I'll trim my
exposure in the riskier issues in my portfolio.
Of course, what matters to me most is the Chinese
marketplace, and there, things still seem to be moving up. But even there, FXI
closed today at $38.23, and its 25-day moving average appears to be at just
about that level (please see the FXI chart down below).
2009-6-15
(Early Afternoon):
That sinking feeling!
Today's falling markets are allegedly keying on a statement
by International Monetary Fund chief Dominique Strauss-Kahn during a visit to
Kazakhstan that, "The
large part of the worst is not yet behind us."
However, the G8 ministers at the current IMF meeting concluded that most world
economies have touched bottom. They also raised their GDP estimates slightly for
the U. S. for 2009 and 2010. "Li
Yang, a former adviser to the People's Bank of China, said he expected China's
recovery to be 'W-shaped' — meaning growth will falter once fiscal and
monetary stimulus wears off, before regaining momentum. Worst
Yet to Come: IMF Chief.
Another downer was that the New York "Empire State"
manufacturing index, considered to be an industrial bellwether, fell a little
more in June (-9.41)
than it had in May (-4.55).
Note that this confirms the "W-shaped" recovery
confirms the rumors that have been making the rounds the past few weeks.
925 is a support level for the S&P 500. A close today
below 925 would be a warning sign. But for now, it would pay to simply watch and
wait. The end of the quarter is coming up, and fund managers have incentives to
dress up their portfolios. Jeff
Saut: Why Shorting Stocks Now Could Be a Grave Mistake Is this the beginning
of the long-awaited pullback? Will institutions view this dip as a buying
opportunity, or is it the beginning of something more serious? Minyanville's
Smita Sedana gives us, "Five
Reasons to Be Cautious Now"
Paul Krugman expresses his concerns about a long-term global
recovery: Will
Hutton. He is also hearing hints about a second round of fiscal stimulus.
2009-6-12:
Today was another tug-of-war day, with the markets marching in place.
The NASDAQ
Composite retreated
4
points (-0.19%)
to 1,858.80,
the Dow
rose
28.34
points
(0.32%)
to
8,799.26, and the S&P 500 increased 1.32
points (014%)
to close at 946.21.
As
mentioned above, Oil fell
0.69
to $71.35
a barrel, while gold
dropped
$21 to
941.
The VIX
was basically unchanged at 28.15.
After breaking out on the upside toward the end of May,
the market indices have traced out a rare plateau of closing prices, trading in
an uncommonly narrow range since the 1st of June.
2009-6-11:
Before the day was done, the S&P
500
reached an intra-day high of.956,
then fell rapidly below 944,
to rebound slightly with heavy buying in the last few minutes of the day. Oil
rose above $73
a barrel but fell back at the close.
I saw confirmed today the fact that the price of oil is
rising, as are other commodity prices, in anticipation of a global
economic recovery. Of course, mild inflation, which the World's
central banks can control, is what they are seeking as an antidote to
deflation, which they can't control.
The NASDAQ
Composite retreated
9.29
points (0.5%)
to 1,862.37
,
the Dow
percolated
up 31.9
points
(0.37%)
to
8,770.92, and the S&P 500 increased 5.74
points (0.61%)
to close at 944.89.
As
mentioned above, Oil closed
at $72.24
a barrel, while gold
rose
$7 to
962.
The VIX
fell to a "new" low of 28.11.
In short, the stock markets' general direction is still
up.
2009-6-11
(Noon):
In case you were wondering, the stock market has quietly, sneakily reached
a new post-March high of not-quite
954
so far today, topping its June 2nd and June 10th intra-day highs of
not-quite 950.
Incidentally, there is alleged to be hidden resistance
at S&P = 950, so clearing this hurdle should open the door to further
advances.
2009-6-10:
Today, the indices dropped slightly. Oil added another $1 a barrel, and is
approaching $72 a barrel. Interest rates on Treasury bonds rose to 3.99%.
But as I said last night, higher oil and interest rates would be expected
in anticipation of an economic recovery, and in fact, to me, signal a
recovery.
The NASDAQ
Composite retreated
7.05
points (-0.38%)
to 1,853.08
,
the Dow
slid
24.04
points
(-0.27%)
to
8,739.02, and the S&P 500 jettisoned 3.28
points (-0.35%)
to close at 939.15.
As
mentioned above, Oil hit
$71.85
a barrel, while gold
was
unchanged at
955.
The VIX
was also unchanged at 28.27.
2009-6-9:
For a third day in a row, the indices have hugged the flat line. They
started up this afternoon, but then fell in the last two hours of trading,
perhaps because oil closed at $70.66 a barrel. (Of course, $70+ a barrel
isn't that much different from $69+ a barrel, but psychologically, $70 a
barrel underscores the potential headwind facing the economy that's
presented by higher energy prices.) Higher interest rates are also a
concern. (It seems to me that higher energy prices and higher interest
rates would accompany any recovery, but of course, this time, the Fed
isn't able to turn the economy back on by lowering interest rates the way
it has in conventional recessions.
The NASDAQ
Composite advanced
17.73
points (0.96%)
to 1,860.13
(putting it up 46.5% since its March 9th low),
the Dow
slid
1.36
points
(-0.02%)
to
8,763.06, and the S&P 500 tacked on 3.29
points (0.35%)
to close at 942.43.
As
mentioned above, Oil hit
$70.66
a barrel, while gold
added
$2
to $955.
The VIX
exfoliated 1.5
to 28.27.
In short, nothing happened again today.
Last night, Mark Hulbert published an update on the
sentiment indicators he follows: Commentary:
Is irrational exuberance staging a revival?, and they're more bearish
than ever. His short-term timing investment advisory newsletters have
risen from a 57% rise in bullishness to a 60% rise in bullishness over the
past week.
Paul Krugman, Permanent Link to Dismal hours,
links to a weblog
piece by Harvard economist Jeffrey Frankel, who is a member of the
National Bureau of Economic Research' Business Cycle Dating Committee. Dr.
Frankel has discovered that when you look not at layoff numbers, which are
improving, but at the weekly number of hours worked, they're falling at
the same precipitous rate they were dropping last fall.
Meanwhile back at the bourses, Michael Ashbaugh
observes, Profoundly
moving, that "the U. S. markets' path of least resistance remains
higher until proven otherwise."
Juxtaposed against this is the Cabot Market Letter,
which is unabashedly optimistic.
A look at the two-year S&P 500 chart below shows
that, had you bought it in April when its 50-day moving average turned up,
it would already have gained almost 200 points. Since then, it has risen
only about 85 points, and hasn't budged since June 1.
My own personal investments are in alternative energy
funds, and in China and Emerging Markets stocks recommended by the Cabot
China and Emerging Markets Report, so I'm not entirely locked into the U.
S. stock market.
2009-6-8:
The indices marched in place again today. After bursting out of their
trading ranges last week, the indices have temporarily stalled just above
the tops of their ranges. The immediate causes given for this behavior are
rising interest rates and rising oil prices. However, the rumor that the
Fed may start raising rates late this year suggests to me that the Fed
feels assured that a recovery is in the works.
The NASDAQ
Composite declined
7.02
points (-0.38%)
to 1,842.40,
the Dow
added
a negligible 1.36
points
(0.02%)
to
8,764.49, and the S&P 500 subtracted 0.95
points (-0.1%)
to close at 939.14.
Oil
climbed
a mite to $68.51
a barrel, while gold
receded
$10
to $953.
The VIX
minced up 0.15
to 29.77.
In short, nothing happened today.
In the meantime, the three major indices are
significantly above their 200-day moving averages, and are continuing to
work their way upward.
I have prepared a recap of the super-bull/super-bear
market pattern here for friends.
2009-6-5:
The markets were basically unchanged today. Everything I wrote yesterday
still applies today, so I'll leave it where it is.
The NASDAQ
Composite gained
0.6
points (-0.03%)
to 1,849.42,
the Dow
added
a paltry 12.89
points
(0.15%)
to
8,763.13, and the S&P 500 added 2.37
points (-0.25%)
to close at 940.09.
Oil
dropped
a mite to $68.38
a barrel, while gold
receded
$20
to $963.
The VIX slipped -0.56
to 29.62.
There are expectations that the Fed will raise interest rates
slightly toward the end of the year, based upon the recovery that seems to be
underway. Meanwhile, inflation worries are returning. (The stock market has to
worry.) This is the time to buy aggressively into the stock market. The safer
investing in equities seems, the riskier it is.
I've been much slower to invest during this cyclical bull
market than I've been in the past for the simple reason that this time, the
music threatened to stop. All the other recessions since World War II have been
instigated by the Federal Reserve and have been under its control. But this
time, the Fed fired its last bullet (cutting interest rates to 0%-to-0.25%), and
the bear kept on charging. It took all the king's horses and all the king's men
to stop
this
bear.
I'll continue to hold stocks until the 50-day moving average
goes south, or until my advisory services recommend pulling the plug.
2009-6-4: