Daily Investment Interpretations Archive

July 1, 2009, to December 31, 2009

Investment Archive, July 1, 2009 to December 31, 2009
January 1, 2009, to June 30, 2009
July 1, 2008, to December 31, 2008
May 7, 2008, to June 30, 2008

2009-12-31: Well, shiver my timbers! Not only did the markets not close at noon today the way I had thought they would, they also staged an end-of-day retreat of the order of 1%!. The NASDAQ Composite ended the day down 22.13 points, (-0.97%) to close at 2,269.15, the Dow tumbled 120.24 points (-1.14%) to close at 10,428.27, and the S&P 500 slid 11.32 points (-1%) to 1,115.10. Oil climbed to $79.62 a barrel. Gold gained $6 to end the year at  $1,097. The VIX rose 1.81 to 21.77. 
    What I suspect happened was that some would-be sellers of stocks waited until the last minute to see whether they could get more for their assets, but then took whatever prices they could get in the last half hour of trading. (The S&P 500 dropped 8 points in the last 30 minutes of the day's trading.) Why did the indices drop? The good news, First-time jobless claims at 16-month low, was interpreted as bad news: U.S. stocks decline on rekindled rate worries and Treasury yields headed to biggest jump in a decade, since it suggests inflationary pressures and rising interest rates. To this, Mark Hulbert has added, Mark Hulbert: The trouble with T-bills.
    In reality, though, it may be that the markets needed a healthy pullback, and they got it.


2009-12-30: The market indices treaded water today . The NASDAQ Composite rose 2.88 points, (0.13%) to close at 2,291.28, the Dow eased up 3.1 points (0.03%) to close at 10,548.51, and the S&P 500 sidled up 0.22 points (0.02%) to 1,126.42. Oil was unchanged at $78.72 a barrel. Gold fell $10 to $1,098. The VIX fell 0.05 to 19.96. 
  
I haven't seen any news worth mentioning today. However, Todd Harrison's shibboleths for the coming year are inscribed in this article: Lessons learned from years in markets and life.
    With half-a-trading-day left in 2009, I don't expect much to happen tomorrow. I should think that most institutional money managers will have settled their accounts for the year... and New Year's Eve is on tap.


2009-12-29: The market indices fell a trifle today. The NASDAQ Composite declined 2.68 points, (-0.12%) to close at 2,288.40, the Dow eased down 1.67 points (-0.12%) to close at 10,545.41, and the S&P 500 slipped 1.58 points (-0.14%) to 1,126.20. Oil was unchanged at $78.72 a barrel. Gold fell $10 to $1,098. The VIX rose 0.08 to 20.01. 
  
The Case-Shiller home price index was flat in October after dropping the two previous months. Consumer confidence rose again, though not as much as analysts had been predicting.
    The markets are certainly due for at least a moderate retrenchment.


2009-12-28: After falling most of the day, the indices began climbing during the last two hours of trading. The NASDAQ Composite crept up 5.39 points, (0.24%) to close at 2,291.08, the Dow rose 26.98 points (0.26%) to close at 10,547.08, and the S&P 500 eased upward 1.3 points (0.12%) to 1,127.78. Oil climbed to $78.71 a barrel. Gold climbed $2 to $1,108. The VIX rose 0.45 to  19.92. 
  
The dollar fell today, which probably helped boost the markets. Otherwise, I don't see anything of any consequence in the news. The market has been up now for six days in a row, so a "down day" wouldn't be surprising.
   Here's one intriguing article: Room for the rally to run?.


2009-12-24: All three indices broke through to new highs for 2009. The NASDAQ Composite crept up 16.05 points, (0.71%) to close at 2,285.69, the Dow rose 53.66 points (0.51%) to close at 10,520.10, and the S&P 500 eased upward 5.89 points (0.53%) to 1,126.48. Oil climbed to $78.05 a barrel. Gold climbed $10 to $1,104. The VIX ended at  19.54. 
   Good news propelled the markets higher on low volume: First-time jobless claims drop, and  Durable-goods orders up 0.2%. First Albany's Hugh Johnson: Don't get too excited about gains. This is year-end activity. But he does mention that the markets have risen farther than in any other year since 1932.


2009-12-23: The Nasdaq Composite and the S&P 500 once again established new highs for  the year, though not by much. The NASDAQ Composite crept up 6 points, (0.27%) to close at 2,258.67, the Dow rose 11.57 points (-0.11%) to close at 10,453.36, and the S&P 500 eased upward 2.57 points (0.23%) to 1,120.59. Oil climbed to $77.25 a barrel. Gold dropped $8 to $1,095. Yesterday, the VIX slipped 0.95 to 19.54. It was unavailable today.  
    Tomorrow will probably be a quiet half-day, before everyone slips away for the holiday.
    The news right now is good, but then, it's always good when the market's rising..
    The five articles below might be of interest.
    A calmer market in store for 2010  
    Value Line legend Sam Eisenstadt tips 20% stock rise next year 
    Robert P. Murphy: Don't get delusional about deflation  
    Gold sentiment picture rapidly improving  
    Weidner on the ghost of Wall Street future  


2009-12-22: The Nasdaq Composite and the S&P 500 established new highs for the year, breaking out of their trading ranges. . The NASDAQ Composite upwelled 15.01 points, (0.67%) to close at a new high at 2,252.67, the Dow rose 50.79 points (0.49%) to close at 10,464.93, and the S&P 500 eased upward 3.96 points (0.36%) to 1,118.02. Oil climbed to $74.33 a barrel. Gold dropped $9 to $1,087. The VIX slipped 0.95 to 19.54.   
    For what very little these prognostications are worth, here are a few for 2010: 11,500 in 2010?, Low returns normal? Don't buy the hoax, Hold on tight, and Hulbert: Honor Roll newsletters more bullish.
    We're now in the middle of the Santa Claus rally, with 1½ trading days left this week, and 3½ trading days left next week before the end of the year.


2009-12-21: The market rose again today, flirting with new 2009 highs. The NASDAQ Composite jumped 25.97 points, (1.17%) to close at a new high at 2,237.66, the Dow gained 85.25 points (0.83%) to close at 10,414.14, and the S&P 500 added 11.58 points (1.05%) to 1,114.05. Oil fell to $72.47 a barrel. Gold dropped $16 to $1,096. The VIX declined 1.19 to 20.49.  
    The principal driver for the current fluctuations is the rise and fall of the dollar. (Gold fell today because of a rising dollar.) If the dollar gains much more, it could cause a large bloc of investors who have been shorting the dollar to cut their losses and go neutral, or long on the dollar... the unwinding of the dollar carry trade... and that would be bad for stocks.
    Shares rise, as December starts to look better.


2009-12-18: The market rose somewhat today. The NASDAQ Composite vaulted 22.87 points, (1.45%) to end at 2,211.69, the Dow minced up 20.63 points (0.2%) to close at 10,328.89, and the S&P 500 added 6.39 points (0.58%) to 1,102.47. Oil rose a little to $73.05 a barrel. Gold advanced $5 to $1,112. The VIX declined 0.83 to 21.68.  
   
Basically, everything that happened today and for the past few days is said to be tied to options expiration and hedge fund managers. In the meantime, volume is dropping as we head toward Christmas week.
    Trading is still range-bound, and over an extended period of time.


2009-12-17: Today was a bad day for all the indices. The NASDAQ Composite tumbled 26.06 points, (-1.22%) to end at 2,180.95, the Dow deflated 132.86 points (-1.27%) to close at 10,308.26, and the S&P 500 careened 13.1 points (-1.18%) to 1,096.08. Oil was unchanged at $72.75 a barrel, while gold fell $29 to $1,107. The VIX rose 1.97 to 22.51.  
   
I couldn't find any headlines worth quoting tonight. However, it might be worth noting that this close to the end of the year, after a huge rise from the March lows, most institutional managers probably aren't logically expecting to make much money over the next two weeks. There are only 9 more trading days in the year, and there won't be much going on the day before Christmas and the day before New Year's.


2009-12-16: The Nasdaq and the S&P 500 rose a little today, while the Dow fell a little. The NASDAQ Composite rose 11.05 points, (-0.5%) to end at 2,206.91, the Dow parted with 10.88 points (-0.1%) to close at 10,441.12, and the S&P 500 inched up 1.25 points (0.11%) to 1,109.18. Oil was unchanged at $72.70 a barrel, while gold rose $13 to $1,136. The VIX rose 0.95 to 20.54.  
    Today's lack of luster is attributed to FedSpeak: Fed makes stocks go flat. The Fed made the statement that we're "pretty well through the deterioration" in the labor markets, raising concerns that rising rates might occur rather sooner than later. The article quotes one floor trader saying that after Friday (an options expiration date), not much action is expected through the end of the year, and that most of this year's bad news is behind us (well yeah, most of this year is behind us). Next year? Who knows?

   Mark Hulbert writes, No contrast between best/worst forecasts.
   
Stock market futures are flat-to-down slightly tonight.


2009-12-15: All three indices fell today. Yesterday's uplift has seen no follow-through. The NASDAQ Composite slipped back`11.05 points, (-0.5%) to end at 2,201.05, the Dow parted with 49.05 points (-0.47%) to close at 10,452.00, and the S&P 500 gave back 6.18 points (-0.55%) to 1,107.93. Oil was unchanged at $70.79 a barrel, while gold fell slightly to $1,123. The VIX rose 0.34 to 21.49.  
    Today's retrenchment is ascribed to rising credit card defaults and a compromised lending environment.
    Michael Ashbaugh writes: Technical Indicator: Is S&P set for breakout?

    Mark Hulbert offers, Adviser remains bearish on Treasury bonds.
   
Stock market futures are flat tonight.


2009-12-14: All three indices closed today at their highest levels for the year. The NASDAQ Composite surgeded`21.79 points, (0.99%) to end at 2,212.10, the Dow gained 29.55 points (0.28%) to close at 10,501.05, and the S&P 500 climbed 7.7 points (0.7%) to 1,114.11. Oil was unchanged at $69.86 a barrel, while gold rose slightly to $1,124. The VIX dropped 0.44 to 21.15.  
    The question before us now is that of whether this is a breakout or a fake-out. The markets will have to move a few more points higher before we'll know.
    Marketwatch's Peter Brimelow offers Aden sisters warn of market 'breathers'.


2009-12-11: The Dow and the S&P 500 rose today, while the NASDAQ Composite closed minutely lower. The NASDAQ Composite slipped`0.55 points, (-0.03%) to end at 2,190.31, the Dow hopped 65.67 points (0.63%) to close at 10,471.50, and the S&P 500 annexed 4.06 points (0.37%) to 1,106.41. Oil closed at $69.87 a barrel, while gold fell to close at $1,120. The VIX dropped 0.73 to 21.59.  
    There isn't much commentary tonight (Friday night). However, the Santa Claus rally that runs the last seven trading days for the year averages something like 1.4% gains (15 points on the S&P 500). But that's an average, and the last seven days trading can see a loss.
    The hiring outlook is improving: Positive turn for the job market 
     Gold shows it has more surprises in store.  


2009-12-10: The markets rose modestly again today.  The NASDAQ Composite gained`7.13 points, (0.33%) to end at 2,190.86, the Dow climbed 68.78 points (0.67%) to close at 10,405.83, and the S&P 500 added 6.4 points (0.58%) to 1,102.35. Oil closed at $70.49 a barrel, while gold gained $5 to close at $1,126. The VIX dropped 0.34 to 22.32.  
    Stocks gain on jobs report. In a timely article, Mark Hulbert explains what to expect from the ongoing Santa Claus rally: namely, that the real rally runs the week between Christmas and New Years: What exactly is the Santa Claus Rally.
    David Weidner points out that Goldman's announcement that it will forego its year-end bonuses this year is bound to have a "gotcha" in it: Suspicious over Goldman moves.
    Renewable revolution discusses the dramatic impact that the renewable energy act that the  Administration has enacted will have upon green investments. (China has promised to reduce its carbon footprint by 40%-45% by 2020. That's only 10 years away.)


2009-12-9: The markets rose just enough today to move them a step or two from the mouth of the bears' cave. The NASDAQ Composite rose`10.74 points, (0.49%) to end at 2,183.73, the Dow gained 51.08 points (0.5%) to close at 10,337.05, and the S&P 500 added 4.01 points (0.37%) to 1,095.95. Oil closed at $70.68 a barrel, while gold fell another $22 to close at $1,121. The VIX dropped 1.03 to 22.66.  
    Mark Hulbert writes: U.S. stock market may find holiday cheer in tech.


2009-12-8: The Nasdaq and the S&P 500 fell again today--harder this time-- and this time, the Dow fell with them. The NASDAQ Composite fell`16.62 points, (-0.76%) to end at 2,172.99, the Dow gained 104.14 points (-1.00%) to close at 10,285.97, and the S&P 500 backed off 11.31 points (-1.03%) to 1,091.94. Oil closed at $73.03 a barrel, while gold fell another $21 to close at $1,143. The VIX climbed 1.59 to 23.69.  
    Why did the markets subside? It's attributed to a strong rise in the dollar because of global financial insecurity and a "flight to quality":Stocks trip as dollar surges. A key factor here is probably the downgrading of Greece' credit rating, and warnings by Moody's about the UK and the US: Energy leads U.S. sharply lower,.
    Meanwhile, Michael Ashbaugh observes, Michael Ashbaugh sees a range-bound U.S. market), that the bulls still have possession of the ball. Also, the Dow transports are up for the year: A bullish signal.
    Two interesting articles, on by Marketwatch' Dr. Irwin Kellner, and the other from the Fidelity Group website, discuss the policy changes behind the bubbles that have characterized the past 15 years (dot.com followed by real estate and banking), and observe that we're presently seeing bubbles in the stock market and in gold because of the excess liquidity that the central baks have provided to curb the "Great Recession: Policy was behind roller-coaster decade and Low rates, the stock market and what's next


2009-12-7: The Nasdaq and the S&P 500 dropped a little; the Dow rose minutely. The NASDAQ Composite fell`4.74 points, (-0.22%) to end at 2,189.61, the Dow gained 1.21 points (0.01%) to close at 10,390.11, and the S&P 500 backed off 2.73 points (0.25%) to 1,103.25. Oil closed at $74.15 a barrel, while gold fell another $6 to close at $1,164. The VIX dropped 0.85 to 22.10.  
    I can't find much in the way of investment news tonight. What I find significant is the way the markets have failed to break up out of their trading ranges for 19 days now. It suggests to me that there's a lot of selling into rallies to lock in annual gains. After all, how much higher are the indices apt to go over the next three weeks? Does it make sense to chase further gains? Or would it be wiser to lock in profits to prevent year-end losses?


2009-12-4: After reaching new intra-day highs the indices plunged, then worked their ways up to modest advances. The NASDAQ Composite gained`21.21 points, (0.98%) to end at 2,194.35, the Dow dropped 11.75 points (0.22%) to close at 10,388.90, and the S&P 500 added6.06 points (0.55%) to 1,105.98. Oil closed at $75.47 a barrel, while gold dove $49 to close at $1,169. The VIX dropped 1.21 to 21.25.  
    Todays' good news that raised the markets higher was, first, that the unemployment rate fell from 10.2% to 10.0%, with nonfarm payrolls falling by only 11,000... the best since December, 2007... and second, that U.S. Oct. factory orders up 0.6% vs flat expected. These unexpectedly good economic reports led to a strong rise in the dollar, with a corresponding drop in commodity prices: Gold plunges, dollar leaps, Gold tumbles 4% as dollar surges on jobs data. This good news also led to Expectations of 2010 Fed rate hike on rise
    Mark Hulbert writes: Stock funds suffer more withdrawals. Also, Manager buys gold, uranium stocks.
    Monday will mark the end of the first week of December. Recently, the markets have been tracing out an unusually long, flat plateau: Investors grow more cautious as year-end approaches. This excellent article observes that investors are still waiting for a pickup in corporate revenue growth. Earnings growth so far has been driven by cost cutting.


2009-12-3: The markets nose-dived today. The NASDAQ Composite fell`11.89 points, (-0.54%) to end at 2,175.14, the Dow dropped 86.53 points (-0.83%) to close at 10,366.15, and the S&P 500 lost 9.32 points (-0.84%) to 1,099.92. Oil closed at $75.74 a barrel, while gold added $5 to close at $1,218. The VIX rose 1.34 to 22.46.  
    Apparently, today's late-in-the-day downturn was a result of the second Federal Reserve governor (James Bullard) this week warning that high unemployment won't keep the Fed from raising rates. With Chairman Bernanke on the hot-seat in confirmation hearings, with unemployment on the rise, and with disappointing news in the services and manufacturing sectors, traders might be a bit nervous about this kind of talk. Also, tomorrow's jobs report (Stocks make late-session drop on jobs jitters) may have some investors nervous.
    Stock market futures are slightly negative tonight.
    The next few weeks are the traditional time for a "Santa Claus" rally. On the other hand, some institutional investors may be booking their profits for the year.


2009-12-2: The markets ended the day basically flat. The NASDAQ Composite gained`9.22 points, (0.42%) to end at 2,185.03, the Dow dropped 18.9 points (-0.18%) to close at 10,452.68, and the S&P 500 added 0.38 points (0.03%) to 1,109.24. Oil closed at $76.75 a barrel, while gold added $13 to close at $1,213. The VIX dropped 0.8 to 21.12.  
    Today set new intra-day highs for the S&P 500 and the Dow. At the same time, the longer the markets fail to close above their recent highs, the more likely they are to fall. 
    Stock market futures are up somewhat tonight.
    The next few weeks are the traditional time for a "Santa Claus" rally. On the other hand, some institutional investors may be booking their profits for the year.
    Among other good news: Pace of layoffs slows down again, Fed's Bullard: Oil, gold spike not inflationary, and Beige Book says U.S. economy is improving.


2009-12-1: The markets backed down. today and climbed toward the tops of their recent trading ranges. The NASDAQ Composite added`31.21 points, (1.46%) to end at 2,175.81, the Dow donned 126.74 points (1.23%) to close at 10,471.58, and the S&P 500 gained 13.23 points (1.21%) to 1,108.86. Oil closed at $78.02 a barrel, while gold added $18 to close at $1,200. The VIX dropped 2.59 to 21.92.  
    The Dubai crisis receded into the mists of oblivion today. In addition,
ISM signals continued expansion, and Pending-home-sales rise is No. 9 helped to elevate the markets' "animal spirits". Meanwhile, economist Paul Krugman injected a cautionary note Permanent Link to Double dip warning. Dr. Krugman observes that (1) "the stimulus has already had its maximum impact on the growth of GDP" and
"will hit its maximum impact on the level of GDP in the middle of next year, and then will begin to fade out" and (2) "the rise in manufacturing production is to a large extent an inventory bounce." On the other hand, one "deficit hawk", Federal Reserve member Charles Plosser is  stating that the economy is on track for a sustained recovery, and that it's time to think about raising interest rates: Philly Fed's Plosser makes first call for higher interest rates.
    Mark Hulbert notes that Low volume may be source of concern.
    Michael Ashbaugh states: Ashbaugh: Large-caps lead.


2009-11-30: Today, the indices rose, fell, and then rose again. The NASDAQ Composite added`6.16 points, (0.29%) to end at 2,144.60, the Dow donned 34.92 points (0.34%) to close at 10,344.84, and the S&P 500 gained 4.14 points (0.38%) to 1,095.63. Oil dropped $1.23 to end the day at $77.32 a barrel, while gold lost $8 to close at $1,183. The VIX dropped 0.34 to 24.51.  
    The turnaround was at least in part a rebound from Friday's overblown concerns about Dubai. The markets are also discounting a meager holiday shopping season this year. The good news: A new 'Black Friday' ahead.


2009-11-27: The indices cratered today on news that the state of Dubai may default on its debt obligations. The S&P 500, which was down almost 27 points near the opening, closed down 19 points. this was a thinly traded, half-day session. The NASDAQ Composite fell`37.61 points, (-1.73%) to end at 2,138.44, the Dow plunged 154.48 points (-1.48%) to close at 10,309.92, and the S&P 500 subtracted 19.14 points (-1.72%) to end the half-day at 1,091.49. Oil dropped $1.91 to end the day at $75.97 a barrel, while gold lost $13 to close at $1,176. The VIX jumped 4.37 to 24.85.  
    Tonight's headlines say, "Dubai looks to be contained: U. S. banks are less exposed to this debt than Europe". European markets plunged yesterday on the news, but recovered today. (This may be one of those "flash-in-the-pan" events that impacts the equity markets when they happen, but don't have major long-term consequences.) The financial media are saying that European banks have an estimated $40 billion in exposure to Dubai, which is small compared to the hundreds of billions in write-downs they have accommodate. However, it raises a red flag concerning additional defaults in a market that was on the verge of worrying about a second wave of bank risks. Monday will be when the traders return from their vacations and begin to make the market assessments and decisions.
    Mark Hulbert Giving thanks to skepticism.
    Another article that might be of interest is: Behind gold's flash, oil's a true performer.


2009-11-25: The indices rose slightly. The NASDAQ Composite worked its way up`6.87 points, (0.32%) to end at 2,176.05, the Dow tacked on 30.69 points (0.29%) to close at 10,464.40, and the S&P 500 climbed 4.98 points (0.45%) to 1,110.63. Oil added $1.94 to end the day at $77.94 a barrel, while gold gained gained $21 to close at $1,188. The VIX gained 0.04 to 20.51.  
    It seems to me that the market indices may be showing the kinds of patterns that occur at market tops.
    Good news carried the markets higher today, with the week's unemployment figure coming in at 466,000... high, but lower than 500,000, and falling: Jobless claims fall.
   
Mark Hulbert writes: Gold timers very bullish: "The average gold timer is now more bullish than on each of the past four occasions in which the gold market has topped out, a worrying sign." He also writes: Elliott Wave adviser even more bearish.  
   
In a repeat from last night: "Marketwatch columnist Darrell Delamaide echoes Paul Krugman's assessment that President Obama is making the same mistake President Hoover and later FDR made by buying into the deficit hawks' arguments that the budget deficit rather unemployment is the big danger: Hoover vs. Keynes. " Paul Krugman's columns are resonating strongly with this concern about where this recovery is--or is not--going: Permanent Link to Deficit hysteria, Permanent Link to Notes on the dollar panic, Permanent Link to Gee, that’s De Pressing, Permanent Link to Money, mouth, Permanent Link to A familiar feeling, Permanent Link to A bizarre complacency, Permanent Link to No exit, and Permanent Link to Ramsay MacDonald.          
    It's interesting in this connection that the Fed sees a durable recovery coming, continuing through the next few years.
    Also from last night: "Marketwatch Chief Economist
Irwin Kellner: It's beginning to look a lot like a 'W'. Dr. Kellner advances arguments that the economy is beginning to look as though it's heading south... Todd Harrison's 'widow's peak'".


2009-11-24: The indices fell slightly. The NASDAQ Composite slipped`6.83 points, (-0.31%) to end at 2,169.18, the Dow gave back 17.24 points (-0.16%) to close at 10,433.71, and the S&P 500 climbed 0.59 points (-0.05%) to 1,105.65. Oil closed down at $76.01 a barrel, while gold gained $2 to close at $1,167. The VIX fell 0.69 to 20.47.  
    A slight pullback today after yesterday's run-to-the-upside, but it still remains to be seen which way the markets will go (although a run to 1,120 or 1,130 would be in keeping with this current wave, to be followed by a 5%-or-so dip, and then a final Santa Claus rally into December.
   
Michael Ashbaugh observes that the S&P 500 and the NASDAQ are finding it hard to break through their previous highs: Ashbaugh: Markets hesitate at '09 peaks
   
Marketwatch columnist Darrell Delamaide echoes Paul Krugman's assessment that President Obama is making the same mistake President Hoover and later FDR made by buying into the deficit hawks' arguments that the budget deficit rather unemployment is the big danger: Hoover vs. Keynes
    Marketwatch Chief Economist
Irwin Kellner: It's beginning to look a lot like a 'W'. Dr. Kellner advances arguments that the economy is beginning to look as though it's heading south... Todd Harrison's "widow's peak".
    As a former Morgan Stanley employee, Paul Farrell writes:
15 signs Wall Street pathology is spreading. In this article, he discusses what Goldman Sachs has accomplished at the taxpayer's expense through inside connections, and the way this Goldman Sachs attitude is spreading of  company managements looting their companies at the expense of customers and shareholders.
    Confidence rise is no help explains that an unexpected (alight) rise in consumer confidence and other somewhat upbeat news wasn't enough to turn the stock market up again. 
    Mark Hulbert notes that yields on T-bills are indicating a flight to safety: T-bill yields as low today as in middle of panic     
   
Why hedge-fund giants are going for the gold and How to buy gold, gold ETFs deals with the current boom in gold prices. 


2009-11-23: The indices surged today, hitting new intra-day highs. The NASDAQ Composite gained`29.97 points, (1.4%) to end at 2,176.01, the Dow rose 132.79 points (1.29%) to close at 10,450.95, and the S&P 500 climbed 14.86 points (1.36%) to 1,106.24. Oil rose to to $77.70 a barrel, while gold gained $18 to close at $1,165. The VIX fell 1.03 to 21.16.
    I was expecting the markets to rise today but not like this! The reasons given were an unexpected increase in existing homes sales, and a Fed official's statement that the Fed won't defend the dollar by raising interest rates. Tomorrow could go either way.
    Stock market futures are down tonight.
    Brimelow: Gold watchers divided on future of rally


2009-11-20: The indices fell a trifle for a third day in a row. The NASDAQ Composite subtracted`10.78 points, (-0.5%) to end at 2,146.04, the Dow slid 14.28 points (-0.14%) to close at 10,318.16, and the S&P 500 skidded 3.52 points (-0.32%) to 1,091.38. Oil declined to $76.72 a barrel, while gold gained $7 to close at $1,149. The VIX fell 0.44 to 22.19.
    About all I can add to the numbers is that the daily declines are slowing down. For the past four days, the markets have traced out a U-shaped pattern, dropping during the day only to rise near the end of the day. This hasn't kept the markets from falling, but Monday could be an "up" day after three "down" days. What happens after that will be anybody's guess.
    Here's one stock-market economist's playbook for 2010: Forecast for 2010 (Video).
    Mark Hulbert warns that goldbugs have gotten dangerously optimistic: Bullishness among gold timers very high.
    Finally, Pimco's Gross, others say to go more defensive.


2009-11-19: The indices fell significantly further today. The NASDAQ Composite shifted down`36.32 points, (-1.66%) to end at 2,156.62, the Dow slid 93.87 points (-0.90%) to close at 10,332.44, and the S&P 500 skidded 14.9 points (-1.34%) to 1,094.90. Oil declined to $77.67 a barrel, while gold gained $1 to close at $1,142. The VIX fell 1.03 to 22.66.
    It looks like another dip is underway, with a marketplace that's reaching a broad maximum.
    The news that allegedly justifies today's declines is that job losses caused third quarter home mortgage foreclosure rates to break prior records. The news will now get worse and worse as the indices drop lower and lower.
    Paul Krugman is saying tonight that President Obama went on Fox News worried about the dangers of a double-dip recession if he doesn't reduce the deficit soon, whereas (quoth Dr. Krugman) the real danger of a double-dip recession will come if the Obama administration  doesn't reduce the unemployment rate. Although no one wants to boost the deficit, the deficit isn't out-of hand. 


2009-11-18: The indices fell a bit today (particularly, the NASDAQ). The NASDAQ Composite shifted down`10.64 points, (-0.48%) to end at 2,193.14, the Dow slipped 11.11 points (-0.11%) to close at 10,426.31, and the S&P 500 lapsed 0.52 points (-0.05%) to 1,109.80. Oil rose slightly to $79.67 a barrel, while gold gained $2 to close at $1,141. The VIX fell 0.64 to 21.77.
    The markets declined on a reduction in housing starts: Housing takes a turn for the worse., and inflation that rose 0.3% in October versus an expected 0.2%: Retail-level inflation up 0.3% last month. Here's one inflationary discussion and forecast: The future of inflation (video). Mark Hulbert writes: Another Dow Theory buy signal?.
    I'm afraid that this market may be rolling over and topping out. Stock market futures are down for tomorrow, and have been gradually falling. If the S&P 500 fails to make it to at least 1,120 on this "cycle", it would seem to me that the indices may be signaling an intermediate-term (multi-month) top. 
    Todd Harrison offers these thoughts about the economy: The other side of the dollar. Mr. Harrison's "widow's peak" concerns haven't materialized so far, but that doesn't mean that they won't. Another forecast he has made concerns social unrest. We'll see.
    A discussion of global markets is given here: What investing map looks like without U.S..
    Now is probably a good time to be lightening up, at least on a short-term basis (and since we can never be sure with the stock market whether a short-term turn will metamorphose into a long-term turn in the markets, we probably have to treat short-term changes as though they could be long-term alterations.)


2009-11-17: The indices eked out gains again today. The NASDAQ Composite annexed `5.93 points, (0.27%) to end at another post-March high of 2,203.78, the Dow climbed 30.46 points (0.29%) to close at 10,437.42, and the S&P 500 squeezed out 1.02 points (0.09%) higher at 1,110.32. The indices remained above their resistance ceilings, further reinforcing their highs. Oil declined to $78.88 a barrel, while gold gained $23 to close at $1139. The VIX fell 0.47 to 22.89.
   
Let me repeat what I wrote last night since it still applies.
    "The most remarkable thing to me about what's happening in the equities markets is the way they're tracing out a more-or-less predictable pattern of ascending peaks and valleys. As I mentioned last Wednesday, if the indices behave as they have for the past few months, the S&P 500 will hit an intra-day high of 1,120 to 1,130 this week, followed by a dip to 1,150 or 1,160 toward the end of November, and then a final 'Santa Claus' rally into December. But the indices abhor patterns, so things may not go according to Hoyle."
    Of course, anything can happen, but I'm looking for another dip before the end of this year that might make a good buying opportunity.
An interesting article, What's the Stock Market Worth Now?, by Dr. Jeremy Siegel, cites the 2009 earnings-per-share on the S&P 500 at $56.00 a share for 2009, with an anticipated $74.34 a share for 2010, and $89 a share in 2010. This would compare with about $84 a share on the trailing S&P 500 earnings in June, 200,. when the S&P 500 stood at 1,555. One measure of the 2007 S&P 500 price-to-earnings ratio set it at 16.3, which was not at all excessive. Dr. Siegel also observes that Productivity has been rising at a very rapid rate. (One article I read a few days ago argues that current productivity increases may depend upon increases and automation, and that many of the currently eliminated jobs may never reappear.)
    A Fidelity article, A closer look at the '4-legged bull', concludes that the current market rally still has legs, but that it's getting riskier.
    Three other articles that might be of interest are:
Businesses Mount Efforts to Retain Valued Employees, China's Not the Disaster-in-the-Making You Think It Is, and Falling U.S. Dollar: It's Lack of Demand, Not Rising Supply, Pharo's Dow Says
    Stock market futures are up a small fraction of a percent tonight.  


2009-11-16: Today, the indices broke upward out of their recent range. The NASDAQ Composite annexed `29.97 points, (1.38%) to end at a post-March high of 2,197.85, the Dow climbed 136.49 points (1.33%) to close at 10,406.96, and the S&P 500 increased 15.82 points (1.45%) higher at 1,109.30. Equally important, the S&P 500 and the NASDAQ broke through their resistance ceilings, confirming the post-March highs registered by the Dow last week. Oil declined to $78.88 a barrel, while gold gained $23 to close at $1139. The VIX fell 0.47 to 22.89. 
    The most remarkable thing to me about what's happening in the equities markets is the way they're tracing out a more-or-less predictable pattern of ascending peaks and valleys. As I mentioned last Wednesday, if the indices behave as they have for the past few months, the S&P 500 will hit an intra-day high of 1,120 to 1,130 this week, followed by a dip to 1,150 or 1,160toward the end of November, and then a final "Santa Claus" rally into December. But the indices abhor patterns, so things may not go according to Hoyle.
    Stock market futures are down a small fraction of a percent tonight. Also, the indices look as though they might be in a topping phase. But "might" is the operant word.  


2009-11-13: The indices rose today almost as much as they dropped yesterday.  The NASDAQ Composite added `8.66 points, (0.88%) to end at 2,167.88, the Dow climbed 73 points (0.72%) to end at 10,270.47, and the S&P 500 closed 6.24 points (0.57%) higher at 1,093.48. Oil declined to $76.35 a barrel, while gold gained $8 to close at $1115. The VIX fell 0.88 to 23.36. 
    Right now, the markets are consolidating. A look at similar patterns over the past six months suggests that the indices could well pull back a few percent from here before they move higher into the year-end rally. 
    Robert Prechter, of Elliott Wave fame, argues that gold is showing the optimism and feeding frenzy that characterizes a top, particularly given the fact that inflation isn't a near-term threat:
Gold near peak.
    Minus ça change warns that the falling dollar is fueling an asset bubble in Asia, and that "Wall Street will directly suffer the consequences if that bubble pops."
    The article Weak dollar's driving the U.S. deficit points out that the falling dollar is elevating the price of imported crude oil, and that this is pushing up the foreign trade deficit.
    U.S. consumer-sentiment gauge pulls back in early November. This is the second month in a row that U. S. consumer confidence has fallen, from 73.5 in September to 66.0 in early November. This suggests the possibility of a double-dip recession. With unemployment rolls still rising more than 500,000 a month, the U. S. government is examining the prospects for a second round if stimulus programs. This article examines the U. S. government's prospects for succeeding.


2009-11-12: The indices dropped today.            
   
The NASDAQ Composite sank 17.88 points, (-0.82%) to end at 2,149.02, the Dow tanked 93.79 points (-0.91%) to end at 10,197.47, and the S&P 500 ended 11.27 points (-1.03%) lower at 1,087.24. Oil declined to $76.33 a barrel, while gold lost $8 to close at $1107. The VIX rose 1.2 to 24.24. 
   After climbing 7% in 8 days, the indices are overdue for a down day, and this looks like it qualifies. The next move will be to set psychological stops in place in case the market continues to move down. I really suspect the indices will go higher as part of this wave, but the market will tell us what it's going to do. (It doesn't pay a lot of attention to what I tell it to do.)
    My psychological stop for the S&P 500 is a close at or below 1,074... 1.15% or 13 points below tonight's close of about 1,187.
    Market futures are basically neutral tonight.


2009-11-11: After touching higher highs earlier in the day, stocks closed modestly up, with the S&P 500 and the Dow posting new records for the year.            
   
The NASDAQ Composite moved up 15.82 points, (15.82) to end at 2,168.90, the Dow extended yesterday's gains 44.29 points (0.43%) to end at 10,291.26, and the S&P 500 ended 5.5 points (0.5%) to 1,098.51. Oil added 23¢ to $79.28 a barrel, while gold hit yet another new high at $1115. The VIX rose 0.2 to 23.04. 
    Today's action, like yesterday's, is predicated upon the Fed's good words yesterday. The fact that the Fed isn't worried about inflation and will keep interest rates at 0% indefinitely removed barriers to higher stock prices.
    Among today's articles: History lesson: Buying stocks in 1982, which points out the fact that there are striking differences between the present situation and the circumstances that prevailed in August, 1982, at the end of 16-year secular ("super-") bear market, and the beginning of the 1982-2000 super-bull market. Bulls seek hope in history observes that volume has been steadily falling as the market has moved higher. (Today was a holiday for most U. S. citizens, so volume might be relatively low today for reasons that have to do with holiday trading rather than with a lack of interest in stock acquisitions.)
    The S&P 500 should touch at least 1,120 if this wave is to emulate prior waves. If it doesn't, then its failure to do so will probably signal at least an intermediate-term top.
    The market indices have risen quite rapidly since March without a single 10%-or-greater correction. If this upwelling turns out to be a cyclical bull market, then there will probably be a  10%-or-greater correction coming sometime in the first half of next year.
    If you haven't already invested during this wave, there should be a pullback coming to at least the 1,050-1,060 range on the S&P 500, and if it repeats its recent pattern, that should occur toward the end of this month (November). That said, it's also the case that when the markets become predictable, it's time for them to become unpredictable. (It's remarkable to me that we've had five waves since March, the last three of which seem pretty similar.)
    Michael Ashbaugh's column yesterday was S&P 500 back for another crack at new highs.
    Mark Hulbert writes: Analysis of corporate insiders' behavior.


2009-11-10: The markets were basically unchanged today. The NASDAQ Composite closed down 2.98 points, (-0.14%) to end at 2,151.06, the Dow jumped 20.03 points (0.2%) to end at 10,246.97, and the S&P 500 ended 0.07 points (-0.01%) to 1,093.01. Oil slipped 12¢ to $78.95 a barrel, while gold hit another new high at $1103. The VIX fell 0.31 to 22.84. 
   
I had estimated that if the markets continued to make the kinds of waves they've made since March, the S&P 500, currently at 1,093, should reach about 1,130 next week, and should fall back to a minimum around November 30th. However, this last dip was deeper than prior declines, and the peak could be lower, with markets "rolling over" at a market top. The overall  multi-month, mini-bull market might be nearing its peak, and might correct or worse after the end of this year.
    This is the first down day (if it can be called a down day) after six up days in a row that have raised the S&P 57 points.
    The markets have moved up because it's become evident that the Fed isn't worried about inflation and isn't planning to raise interest rates any time soon. 


2009-11-9: The markets melted up today. The Dow hit a new 2009 high. The NASDAQ Composite exploded 41.62 points, (1.97%) to end at 2,154.06, the Dow jumped 203.52 points (2.03%) to end at 10,226.94, and the S&P 500 garnered 23.78 points (2.22%) to 1,093.08. Oil added $2.00 to $79.27 a barrel, while gold hit a new high at $1102. The VIX fell 1.04 to 23.15. 
   
One of the reasons for exuberance was the fact that world leaders at the G20 Conference announced that the global economy seems to be on track for recovery but that interest rates will remain low. Also the Federal Reserve announced on Thursday that it has no plans to raise rates any time soon. This means that the dollar remains the preferred currency for the "carry trade"... borrowing money in dollars at a low interest rate and investing them elsewhere at a higher interest rate. If the dollar falls against foreign currencies and you own foreign assets, your assets (e. g., Eurodollars) will rise in value against the dollar even if you just leave your money (e. g., Eurodollars) in, viz., a Swiss bank account. Also, for reasons that aren't clear to me, for the past few weeks, a falling dollar has correlated closely with a rising U. S. stock market.


2009-11-8: The Federal Deficit
    During the 1990's, the federal national debt was the great doomsday theme. The  national debt kept growing and growing and growing, and everybody knows that you can't just keep running up your bill and running up your bill. You've got to pay it off. That's what you and I would have to do isn't it? "We're headed for the biggest crash in the history of the United States in the year 2000, and for only $199 a year (a $100 discount from my regular price of $299 a year, but only if you act on this before midnight tomorrow), I'll tell you how to survive and even prosper during the cataclysmic national debt crash that's coming in the year 2000." This was one popular way the financial con artists played the investing public in the 1990's.
    Of course, unlike you and me, governments can and do keep running up their budget deficits without ever paying them off. What counts is the ratio of the national debt to the gross domestic product, coupled with other factors such as low interest rates so that the governments don't have to pay high interest rates on the long bonds they sell. For example, the U. S. national debt in 1945, at the end of World War II, was $259 billion, and the U. S. gross domestic product was $223.2 billion, leading to a 1.16 ratio of national debt to gross domestic product.
    Today, the national debt is, as of tonight, $12 trillion, and the trailing gross domestic product is 14.3 trillion, leading to a ratio of 0.84. But note that the absolute value of the national debt has ballooned from $259 billion to $12 trillion over the past 64 years. It's not the absolute value of the national debt that counts but the ratio of the national debt to GDP. (To put it in personal terms, if your income octuples, you can afford a much bigger home loan than you could before that happened.) And as long as countries pay the interest on their national debts (and they print their own money, they can continue to carry the loans without paying them down or paying them off.

The Real Cost of Fiscal Stimulus:
    I'm going to assume that  a recession has occurred, and that the GDP (Gross Domestic Product) after a year of slowing, and then slightly declining GDP (currently running about $14 trillion a year), the GDP has fallen behind what it would be at full growth by $1 trillion. This loss is permanent no matter what the government does or doesn't do to stem further losses. The horse is already out of the barn. 
    Suppose the U. S. government injects $1 trillion into the economy (which it approximately what it has done) by selling Treasury bonds and adding another $1 trillion to the federal deficit. According to Paul Krugman, federal taxes will return about one-third of this $1 trillion stimulus insertion or about $333 billion to the government within the next year or two.
That leaves a net cost of $667 billion to the taxpayer. But what we want to know is: what would the recession do to the national debt if the government didn't inject 1 $trillion into the economy? Recessions cut tax receipts at all levels of government: federal, state, and local, and force the federal government to add to the national debt in order to keep federal programs running. At $2.7 trillion a year, the federal budget runs about 19% of the annual $14 trillion GDP. So a $1 trillion shortfall this year in GDP below its rising long-term trend means $190 billion less this year in federal tax income. But recessions don't end instantaneously. It generally takes several years before the gross domestic product catches up with where it would be if the recession hadn't occurred, and during that entire time, the deficit between what the economy should be doing and what it's actually doing continues to accumulate. For example, suppose that after falling slightly for a year, the economy suddenly starts moving up at 5% a year for this next year. At the end of this second year, it will still be another $1 trillion behind where it would have been if the recession hadn't taken place. In other words, at the end of the second year, the economy will be $2 trillion behind where it would have been if no recession had occurred. And it will continue to fall behind until the economy grows fast enough long enough for the annual gross domestic product to have caught up with what it would be if there had been no recession. (A specific example is given in Table 1.)
    Note that the kind of loan the U. S. government is taking out isn't like borrowing money for a vacation trip. It's more like borrowing money to invest in your business. The government expects its $1 trillion investment to boost its own future income enough to offset the $1 trillion it's investing, as discussed below, not to mention everyone else's future incomes..

    I need to underscore that what follows below is my own guesstimation and it may be seriously wrong, but it attempts to give some kind of quantitative example for the fiscal stimulus.
    From 1999 to 2006, the GDP (Gross Domestic Product) grew at a rate of about 5% a year... 2% real growth per capita plus a 3%-per-year rate of inflation*
-------------------------------------------------------------------------------------------.
* -
The rate of growth of the GDP between October, 1947 and October, 2006, was about 6.73% a year. The real rate of rise over this 59-year period after correcting for inflation was about 3.68% a year.
-------------------------------------------------------------------------------------------

  
Table 1., below, shows
in the second ("Projected") row, the projected GDP values we would have anticipated if GDP growth had continued at its 1999 through 2006 growth rate of about 5% a year. In other words, I'm taking the actual value of $13.82 trillion for calendar year 2006 and extrapolating 5% growth for the next six calendar years from 2007 through 2012 to estimate what the Gross Domestic Product would have been if there had been no recession.
    The third row ("
Actual and/or Estimated") shows past (2006 through 2008) and projected (2009 and 2010) values of GDP from 2006 through 2010. I'm further assuming that the economy makes a robust recovery, and by 2012, has caught up with where it would have been if there had been no recession (which may be too optimistic, especially considering the fact that a portion of the gains since 2003 have been fueled by ever-deepening debt).
    The fourth row ("
Shortfall") shows the amount which the recession costs the economy each year. Note that the worst shortfall occurs in 2010. Even after the recovery is underway and the GDP is increasing again, it takes a while before the GDP can catch up with its pre-recession trend line. 
    The fifth row ("
Federal Tax Shortfall") shows the cost to the federal government in lost federal tax revenues.

Table 1. -  The Best-Case Scenario: A $1 Trillion Fiscal Stimulus

GDP, in $Trillions 2006 2007 2008 2009 2010 2011 2012
Projected 13.82 14.51 15.24 16.00 16.80 17.64 18.52
Actual and/or Estimated 13.82 14.1 14.26 14.23* 14.4* 16.62 18.52
Shortfall 0 -0.41 -0.98 -1.77 -2.40 -1.02 0
Federal Tax Shortfall 0 -0.08 -0.20 -0.35 -0.48 -0.20 0

    Table 1. represents a best-case scenario. It assumes that the government has pumped $1 trillion into the economy, and that this has been sufficient to cause the economy to recover. I've assumed that the economy accelerates sufficiently rapidly in 2011 and 2012 to bring it back up to its trend line by 2012. For 2011, I've interpolated between an official projection for 2010 ($14.4 trillion) and the trend line projection for 2012 ($18.52 trillion).
    This scenario leads to a total shortfall (loss) to the economy of
$6.58 trillion. and would lead to a $1.27 trillion increase in the national debt.
    I should mention that Paul Krugman and Christine Roemer mention a value of something like 
$2.3 trillion to make up the decline in GDP, and to "prime the pump" to resuscitate the economy. This is only a little over a third of my $6.58 trillion, and is undoubtedly a much sounder estimate than the one I've derived above. Even so, the tax loss to the federal government would be about $443 billion, and of course, the revenue losses to all other segments of the economy, including state and local governments, would be much greater than that.
    Now you and I might say "Whoa down here! How about forcing the government to go on a diet and live within its means the way you and I have to?. If our incomes fall, we cut back on our expenditures. How about demanding that the government do the same?" But $700 billion of that $2.7 trillion or about 26% of it is earmarked for the Department of Defense. Defense contractors by now may have an overpowering influence in Congress, not to mentions public and Republican support. I would suspect that you aren't easily going to take $333 billion a year or any significant fraction of $333 billion a year away from the military-industrial complex that President Eisenhower warned us about in his farewell address. And even if you did succeed in reducing the military budget, it would take a few years to work through current commitments. Beyond that, reducing the military budget cuts defense spending and the associated salaries, and lowers the GDP... not something you really want to do during a recession. Furthermore, various safety nets such as (state-funded) unemployment compensation cost more during a recession. Normally, the 50 states handle unemployment compensation but during the Great Recession, it became desirable to extend and expand unemployment benefits. With state budgets in triage mode, the federal government stepped in to fund extended unemployment benefits. Take it away from Social Security and Medicare? Apart from the hue and cry this might engender, there's also the impact it would have upon consumer spending and consumer confidence.

(To Be Continued)


2009-11-6:  Something ugly happened today: at 10.2%, the unemployment rate broke 10% today for the first time in 26 years.
    T
he NASDAQ Composite advanced 7.12 points, (0.34%) to end at
2,112.44, the Dow climbed 17.46 points (0.17%) to end the day at 10,023.42, and the S&P 500 garnered 2.67 points (0.25%) to 1,069.30. Oil fell $2.19 to $77.65 a barrel, while gold hit $1,096. The VIX dropped 1.24 to 24.19. 
    Last spring, I quoted Paul Krugman daily. Back on the 6th of January, he calculated that the proposed fiscal stimulus package would only provide about 40% of the stimulus the economy needed to get it back on its feet. Christine Romer, a member of the President's Council of Economic Advisors, came up with the same number. But the President was seeking bipartisan support, and didn't ask for the full amount. Dr. Krugman's concern was that the President might find it
politically untenable later on, as his political opponents hammered away on deficit spending anxieties, to ask for additional funds. But Paul Krugman missed the turnaround in the stock market and the economy at the crucial time when the stock market started back up. In May, he ratified the turnaround in the markets and the economy, but that was after largely after the train had left the station. I quit quoting him as attention turned from Depression 2.0 to recovery. But today, he's reiterating the concerns he expressed back in January, saying (Permanent Link to Obama’s trap), "I really, really wish I had been wrong about this--and for a while, as banks regained their footing and stocks went up, it looked as though the administration's softly, softly policy might work out after all. But on the things that truly matter, above all jobs, reality has played out even worse than I feared." (Obama Faces His Anzio) The problem is, among other things, consumer confidence. With unemployment having topped this magic 10% level (notable because it already matches the 1982-83 recession), consumer confidence is apt to take a further hit. There may also be a problem with timing. It would take a while to develop and pass legislation (assuming it can be done), and then more time to get the money into the economy.
    If a stock market stampede for the exits begins, it will feed on itself.
    I'll try to write more about this tomorrow.


2009-11-5:  The bulls finally got back in the game today. The Dow regained the 10,000 level and the NASDAQ leaped 50 points. We appear to be moving back toward the next high after the pundits assured us that the bull run from March to October was over, and that we were looking at a serious market correction.
    T
he NASDAQ Composite advanced 49.8 points, (2.42%) to end at
2,105.32, the Dow climbed 203.82 points (2.08%) to end the day at 10,005.96, and the S&P 500 garnered 20.13 points (1.92%) to 1,066.63. Oil fell $0.78 to $79.77 a barrel, while gold hit $1,090. The VIX dropped 2.29 to 25.43. 
   
The reason for today's rally, at least ostensibly, a drop in jobless claims and upbeat remarks by Cisco. 
    The S&P 500 has risen 30 points from its close at 1,036 on October 30th to its close at 1,066 tonight. It's about halfway back to its previous high of 1,100. This is probably a good time to buy QLD or SSO, especially if the markets peak above their previous highs.
    Tomorrow comes the official unemployment report. 
    Three articles are presented below.

    ETFs aren't all equal
   What if the Fed's wrong? This article asks why the value of gold is rising if the Fed is correct in assuming that inflation will remain under control for a while. (Uh--what about a falling dollar? What about the threat of a collapse of the dollar against foreign currencies? What about a fear-driven bubble?)) 
    Why gold could triple


2009-11-4:  After rising as much as 15 points during the day, the S&P 500 ended about where it started.  The NASDAQ Composite took on  10.9 points, (-0.1%) to end at 2,055.52, the Dow climbed 30.23 points (0.31%) to end the day at 9,802.14, and the S&P 500 garnered 1.09 points (0.1%) to 1,046.50. Oil jumped $2.41 to $80 a barrel, while gold soared to $1,047. The VIX climbed 3.15 to 24.76. Oil increased $0.80 to $80.21 a barrel, while gold rose $2.00 to its highest level ever at $1,087. The VIX dropped 1.09 to 27.72.
    Friday, the monthly non-farm unemployment numbers will be released. Marketwatch' David Callaway explains that investors don't want to be long the market if Friday's job numbers disappoint, but also don't want to miss upward moves in the November-December time frame: Fed to markets: Let the bubble blow.
    My advisory services are still sitting and watching. So far, the markets haven't made decisive moves, and the volatility is quite high.
    Stock futures are down about 0.4% tonight.


2009-11-3:  It's been yet another roller-coaster day in the bourses. The NASDAQ Composite took on  8.12 points, (0.4%%) to end at 2,057.32, the Dow lost 17.53 points (-0.18%) to end the day at 9,771.91, and the S&P 500 struggled up 2.53 points (0.24%) to 1,045.41. Oil jumped $2.41 to $80 a barrel, while gold soared to $1,047. The VIX climbed 3.15 to 24.76. Oil increased $0.30 to $79.27 a barrel, while gold rose $31.00 to its highest level ever at $1,085. The VIX dropped 0.97 to 28.81.  
    As the markets have risen over the past two days, total trading volume has fallen.
    Tomorrow, the Federal Open Market Committee is meeting, and a breathless hush has fallen over the markets. There will undoubtedly be no changes in interest rates, but Fed comments will be parsed and sieved for nuances.
    here are two articles by David Weidner, More Government Sachs? Don't buy it., and Irwin Kellner, Whose expectations drive the market?, .And here's a word of warning: Storm clouds over stocks.


2009-11-2:  It's been another bipolar day on Wall Street. The S&P 500 was up 16 points at 10:40, down 7 points at 2:10, and closed up 6.69 points for the day. Stocks seem to be moving up when the dollars moves down, and down when the dollar moves up. Unfortunately, to the best of my knowledge, predicting the value of the dollar is no easier than predicting the levels of the market indices. 
    T
he NASDAQ Composite annexeded  4.09 points, (0.2%%) to end at
2,049.20, the Dow added 76.71 points (0.79%) to finish at 9,789.44, and the S&P 500 leaped 6.69 points (0.65%) to 1,042.88. Oil jumped $2.41 to $80 a barrel, while gold soared to $1,047. The VIX climbed 3.15 to 24.76. Oil increased $1.13 to $78.13 a barrel, while gold rose to $1,054. The VIX climbed 0.91 to 29.78.  
    One market commentator remarked today that where investors had been buying the dips, they're now selling the rallies.
    There's a bevy of articles tonight.
'Dark pools' comprise 4% of European equity trades also mentions that imstitutional private market exchanges now handle about 11.5% of all daily U. S. volume.
Turnaround Letter not for faint of heart 
    Peter Brimelow comments on the "Turnaround Letter" investment advisory service. It's been highly volatile, but it has slightly outperformed the Wilshire 5000 over the last 22 years.
Born to run 
    Michael Ashbaugh observes that with the S&P 500 already up 65%, it's not a sure thing that the general market can continue to rise. However, he advises that the energy sector is poised to outperform.
Profits made in China 
    This expands upon what the title implies: China is a good place to invest.

Mind the volatility
 
    This author argues that the current mini-bull market has one-to-four months left, but then a grinding several-year bear market will follow.

No irrational exuberance
 
    Mark Hulbert discovers that the best performers over the last year and over the last ten years are bond and international stock funds.

Trade like a fund manager
 
    This article discusses the incentives that guide mutual fund managers as they approach the end of the year. Since their year-end bonuses are tied to their performance relative to the S&P 500, they tend to sell riskier stocks and load up on S&P 500 wheel horses (since their bonuses will depend upon how well they do relative to the S&P 500). He lists AT&T, Johnson & Johnson, Walmart, IBM, ADP, Abbott Labs, and GE as running at the head of this pack. Then once the new year arrives, these managers will unload their blue chips and stock up on promising, riskier stocks. He recommends buying an S&P 500 exchange-traded fund (like SPY), holding it until late in December, and then switching to a small-cap ETF in anticipation of the January small-stock run-up.

Roubini Says Carry Trades Fueling 'Huge' Asset Bubble (Update3 ... 
    Nouriel Roubini (Dr. Doom) explains that investors borrow money from countries that have low interest rates and invest the money in hard assets in countries that are booming (China?). This creates huge asset bubbles that may burst in a year or two. (The article notes that Dr. Roubini warned in March that the rebound was a "dead cat bounce", said in May that it may "fizzle", and warned in July that "the economy is not out of the woods".) 

On the downswing
    This article warns that "the economy is not out of the woods" (Dr. Doom is right.) It recommends some commodity stocks and some hedging strategies.


2009-11-1 (Sunday Night):  Stock market futures are up a little this evening.
    Surprising as it might sound, my Top Stock Portfolios advisory service is entertaining the possibility that the markets might conceivably go up this week, but so far, that's just a thought. November and December are excellent months for stocks. The markets are, presumably, driven right now by funds and large-scale investment entities playing a game of high-stakes poker with each other. The markets will act in ways that confound a large share of these very-astute players. We'll see.


2009-10-30:  What a day! Well, the verdict is in: Yesterday was a "flash in the pan". Everything I said about upwellings like yesterday's is true. Since March, these kinds of "up" days after markets have dropped the way they have this week have always been followed by additional "up" days. But not this time.
    T
he NASDAQ Composite sagged  52.44 points, (-2.5%) to end at
2,045.11, the Dow dropped 249.85 points (-2.51%) to finish at 9,712.73, and the S&P 500 slumped 29.92 points (-2.81%) to 1,036.19. Oil declined $2.87 to $76.99 a barrel, while gold fell to $1,040. The VIX climbed 5.93 to 30.69... its highest level since the July pullback.
    I didn't think this would happen. I thought the market would either go straight up today, or would dip and then go up. I was wrong.
    Although I made about 0.76% on my investment in QLM,
this has been an object lesson in the fallacies of my own investment interpretations and decisions. I generally follow the investment advice of the China and Emerging Markets Report and the Top Stock Portfolios Daily Decision guidance, but yesterday morning, I played a hunch. It worked out yesterday, and I "got out of town ahead of the sheriff" today, but long-term, I'd probably lose money rather than making it.
    David Moenning, the founder of the Top Stock Portfolios advisory service, observed today that the market right now is just too volatile. Also, the markets are looking vulnerable. Volume has been rising as the markets have fallen, suggesting further downside to come. (Today's selling volume matched that of Wednesday's selling pace.
    Mark Hulbert points out that traditionally, the next six months are historically the best months to be in stocks: A treat from Wall Street? (audio). He also notes that this rule-of-thumb wouldn't have worked in 2008 or early 2009. You should have stayed out of stocks from June, 2008, to March 6, 2009.


2009-10-30 (An Hour Later):
  The bulls and the bears have been duking it out this morning, with the bears still in control. We won't really know until the close, unless the indices break up or down dramatically. Basically, though, looking at the charts, it looks to me as though there should have been follow-through this morning if yesterday's upsurge marked a market turnaround.
    I sold my QLD just now for about a $200 profit. (I could have sold my QLD for nearly a $500 profit a little earlier this morning, but I guess if I had that power of prophecy, I could become a billionaire in short order.)

2009-10-30 (After the Opening):
  This is the moment of truth. If yesterday marked a turnaround off a short-term bottom, the markets should experience early selling, followed by a rise. So far, the sellers are in control. 
    Both Mark Hulbert: No more bullish now than 2,000 points ago, and John Buckingham, the publisher of The Prudent Speculator, are observing that sentiment is quite bearish, and that, from a contrarian viewpoint, this is good for the markets.


2009-10-29 (Early Afternoon):  The S&P has climbed as much as 20 points. Looking at the patterns of previous dips since last March, generally, when the markets rise as strongly as this after a dip, they continue to rise for the next week or so. Among those cases where they haven't (in May and in June-July), there have been a few days at the top followed by a retesting of the lows. But more often than not, strong rises out of dips have been followed by a few more "up" days before a "down" day occurs. And the "end of the year" performance anxieties must still be there. It's time for dip buyers to do their thing.
    With stock futures up and the GDP coming in stronger than expected, I bought back into QLD before the close this morning. It was (and still is) a major gamble. It remains to be seen whether my move will pay off. But I don't have very much money invested in QLD, so I shouldn't lose too much money if QLD sinks again.

2009-10-29 (Noon):
  The markets are having their "dead cat bounce" this morning. The growth in GDP was greater than expected. (The next argument will be that this increase in GDP is the result of the replenishing of inventories, and that the economy is dependent upon government subsidies and can't sustain this recovery.  However, Businessweek and other sources are arguing that the swift adjustments made when the economy was sinking will support a durable recovery. But stock market mavens can make their fortunes only if the markets are manic-depressive.) The only question is whether this bounce is only a bounce, to be followed by further deterioration, or whether it represents a market turning point. Right now, with the S&P up 17 points and the Dow up 135 points, the chart pattern is hinting a turnaround to me.


2009-10-28:  And I thought yesterday was a wild day in the trading pits of the money changers! 
    The NASDAQ Composite tumbled a whopping 56.48 points, (-2.67%) to end at 2,060, the Dow shed 119.48 points (-1.21%) to finish at 9,762, and the S&P 500 lost 20.78 points (-1.95%) to 1,042.63. Oil sid to $77.24 a barrel, while gold fell to $1,031. The VIX climbed 3.08 to 27.91.
    Yesterday, I said, 
    "I haven't the first clue why this has happened. However, the divergence among the three major indices looks discomfiting to me. After today, it would probably be best to stand aside and wait to see which way this market will break (The S&P would have to fall another 1% to 2% to match previous pullbacks.)" 
    Well, the S&P has now fallen another 2%, and we're still waiting to see which way the market will break. The S&P is now down about 5½ %. After six "up" days in a row, one "down" day, and then two more "up days" during which the S&P gained 5%, then five days of treading water, and then five "down" days in a row during which the S&P has lost 5%, the markets could be ready for a "dead cat bounce" tomorrow, meaning that we might not get a meaningful market test before Friday at the earliest.
    The biggest dip we've had so far since the March low came in June. It lasted nearly a month, and saw a 9% decline in equity prices, from 956 on June 11th to 870 on July 8th.
    For whatever reasons, my advisory services aren't providing any comments tonight. Cabot's China and Emerging Markets Report is 25% in cash, while TopStock Portfolios is 100% in cash in two accounts, and shorting the markets in the third.
    The market indices are falling on rising selling volumes.
    Here is Michael Ashbaugh's (Tuesday) technical analysis of the markets: Cracks appearing in the short-term trend?
    Here are articles by Mark Hulbert and Peter Brimelow: 
Why inflation could stay low for a while
Amazon's good fortune reminscent of Nifty Fifty
Important to draw right lessons from 1929 crash

Lessons from the Nifty Fifty

Crash of 2008 survivor is still bullish
    My Monday advice about "nibbling on stocks again, such as the (Nasdaq Composite) Proshares Ultra QQQ index QLD" doesn't look so swift right now. If you nibbled on QLD, it will probably be OK, but I backed away last night, and I would back away tonight. I recommended QLD on Monday because one of my advisory services recommended it on Monday, and because it was down several percent. My advisory service recommended selling QLD on Tuesday, and I sold my stake in it at a loss. I'm currently sitting in cash. (I'm sure my advisory service is embarrassed over the move, but they did the best they could based upon the information available on Monday and on Tuesday, and their "sell" advisory on Tuesday has certainly been validated.) 
    The markets will recover, and QLD will shine again, but the short-term outlook isn't as favorable as it was on Monday.
    For what it's worth, stock market futures are up today.


2009-10-27:  This was another wild day in the trading pits of the money changers.
    The NASDAQ Composite tumbled a whopping 25.76 points, (-1.2%) to end at 2,116.09, the Dow rose 14.21 points (0.14%) to finish at 9,882.17, and the S&P 500 lost 3.54 points (-0.33%) to 1,063.41. Oil declined to $79.44 a barrel, while gold fell to $1,035. The VIX climbed 0.52 to 24.83.
    I haven't the first clue why this has happened. However, the divergence among the three major indices looks discomfiting to me. After today, it would probably be best to stand aside and wait to see which way this market will break (The S&P would have to fall another 1% to 2% to match previous pullbacks.)


2009-10-26:  The markets fell again today, and by more than 1%. Yesterday's observation that the markets could, possibly, be "in a topping phase preliminary to a deeper pullback (e. g., down to, maybe, 1,050 on the S&P 500)" looks prescient today. The indices will have to dip another 1% to 2% to match previous pullbacks (not that there's any reason why the markets have to behave the way we might expect them to behave).
    The NASDAQ Composite fell another 12.62 points, (-0.59%) to end at 2,141.85, the Dow retracted 104.22 points (-1.05%) to finish at 9,867.96, and the S&P 500 climbed 12.65 points (-1.17%) to 1,066.95. Oil declined to $78.78 a barrel, while gold fell to $1,043. The VIX climbed2.04 to 24.31.
    It's probably time to start nibbling on stocks again, such as the (Nasdaq Composite) Proshares Ultra QQQ index QLD..


2009-10-23:  Whoops! The markets have tumbled again today, erasing yesterday's gains. It looks as though the markets are, possibly, in a topping phase preliminary to a deeper pullback (e. g., down to, maybe, 1,050 on the S&P 500).
 The NASDAQ Composite gave back 10.82 points, (-0.05%) to end at 2,154.47, the Dow tumbled 109.13 points (-1,08%) to finish at 9,972.18, and the S&P 500 climbed 13.31 points (-1.22%) to 1,079.60. Oil declined to $79.64 a barrel, while gold fell to $1,056. The VIX climbed 1.58 to 22.27.


2009-10-22:  The dip buyers are back--or so it would seem, since the markets have risen substantially today. The NASDAQ Composite rose 14.56 points, (0.68%) to end at 2,165.29, the Dow jumped 131.95 points (1.33%) to finish at 10,081.31, and the S&P 500 climbed 11.51 points (1.06%) to 1,092.91. Oil hit a new high at $81.30 a barrel, while gold fell to $1,059. The VIX dropped 1.53 to 20.69.
    If that was a pullback, it was short one. Stock market futures are up tonight.
    The S&P 500 is 7 points below the 1,100 mark.


2009-10-21:  Today, the markets have adjusted downward a bit farther. The NASDAQ Composite lost 12.74 points, (-0.59%) to end at 2,150.73, the Dow declined 92.12 points (-0.92%) to finish at 9,946.36, and the S&P 500 subtracted 9.68 points (-0.89%) to 1,081.40. Oil hit a new high at $81.00 a barrel, while gold rose to $1,065. The VIX rose 1.32 to 22.22.
    It appears to me as though the markets are entering another pullback phase. If so, and if this drawdown were to be a clone of the previous dips, the S&P 500 should fall to about 1,050 before rebounding. But there are certainly no guarantees. If the markets start to tank, we'll have to stand ready to evacuate.
    The indices are now off 15%-to-1,8%. Now might be a good time to sell anything dicey.
    Master trader Todd Harrison has this to say about where the markets must eventually be heading: Market relativity and year-end trading tips. Mark Hulbert writes: A few letters now beat Oct. 2007 levels.


2009-10-20:  Today, the markets have adjusted downward a bit. The NASDAQ Composite lost 8.52 points, (-0.4%) to end at 2,167.60, the Dow fell 47.69 points (-0.47%) to finish at 10,044.50, and the S&P 500 flitted down 6,85 points (-0.62%) to 1,091.06. Oil ended up at $78.82 a barrel, while gold is unchanged at $1,059. The VIX rose 0.06 to 21.49.
   
Michael Ashbaugh's weekly technical analysis says: S&P, Dow approach technical target: Ashbaugh.  
    U.S. is 'dead man walking,' says Sprott

    Taking the inside path to Wall Street riches.


2009-10-19:  Today, the markets have climbed to new 2009 highs. The NASDAQ Composite gained 19.52 points, (0.91%) to end at 2,176.32, the Dow rose 96.28 points (0.96%) to finish at 9,995.91, and the S&P 500 flitted up 10.23 points (0.94%) to 1,097.91. Oil ended up at $79.64 a barrel, while gold rose $7 to $1,058. The VIX rose 0.06 to 21.49.
    My technical advisory service is still partially in cash.

    After the markets closed, Apple Computer and Texas Instruments both announced earnings above estimates.
    A major hedge fund manager has placed bets on a collapse of the world's major currencies: Currency spiral. Mark Hulbert writes: Remember Black Monday.
    Market futures are pointing higher tonight... particularly, the technology-laden Nasdaq.


2009-10-18:  For whatever reasons, stock market futures are down a bit tonight.


2009-10-16:  Today, the markets gave up some ground. The NASDAQ Composite fell back 16.49 points, (-0.76%) to end at 2,156.80, the Dow declined 67.03 points (-0.67%) to finish at 9,995.91, and the S&P 500 flitted up 8.88 points (-0.81%) to 1,087.68. Oil ended up at $78.67 a barrel, while gold rose $1 to $1,052. The VIX fell 0.29 to 21.43.
    GE reported lower-than-expected profits today. However, about 4/5ths of the 61 companies that have reported earnings so far have come in above expectations. Also, output registered the fastest growth in four years.
    Mark Hulbert writes, Still no agreement among Dow Theorists.


2009-10-15:  Today was yet another up day for the markets.
T
he NASDAQ Composite sidled up 1.06 points, (0.05%) to end at
2,173.29, the Dow gained 47.08 points (0.47%) to finish at 10,062.94, and the S&P 500 flitted up 4.54 points (0.42%) to 1,096.96. Oil ended up at $77.93 a barrel, while gold fell $14 to $1,051. The VIX fell 0.13 to 22.86.
    The futures markets are up slightly tonight, with Google and IBM earnings coming in above expectations. The markets are reaching the point at which a pullback might be in order. Of course, the markets generally don't do what the majority expects them to do.
    Here are a few articles from today's selection,
Callaway: Wake me when we're back at 14,000
Weidner on investors' lost decade
Housing may yet be in for a double dip


2009-10-14:  Today was the day that the Dow broke 10,000 (10 years after its first penetration of the 2000 mark). The NASDAQ Composite rose 32.34 points, (1.51%) to end at 2,172.23, the Dow galloped 144.8 points (1.47%) to finish at 10,015.86, and the S&P 500 trotted 18.83 points (1.75%) to 1,092.02. Oil ended up at $75.82 a barrel, while gold remained unchanged at $1,065. The VIX fell 0.13 to 22.86.
   
J. P. Morgan and retail sales exceeded analysts' expectations.
    Typically, when the Dow crosses a new line in the sand, it's followed by a pullback. The markets may have risen far enough to warrant another dip, but typically, this is preceded by a few days of topping before the markets roll over and tumble back down.
    Tonight, the S&P 500 is up 63.7% from its March low. The greater part of its rise is probably behind it. (A 42% increase from here would put it back at its October, 2007, peak.) At the same time, as a cyclical bull market in an ongoing secular bear market, it could turn tail at any time.
    The Chinese Halter Index is now well above its 26-day and 50-day moving averages. For what it's worth, the Halter Index is still about 40% below its (frothy) 2007 peak. And of course, the Chinese economy has been growing over the past two years.


2009-10-13:  After six up days in a row, the Dow and the S&P 500 ended the day down a trifle, while in a reversal of yesterday's close, the NASDAQ Composite ended the day up a trifle. The NASDAQ Composite closed up 0.75 points, (0.04%) to end at 2,139.89 (for all intents and purposes, unchanged), the Dow gave up 14.74 points (-0.15%) to finish at 9,871.06, and the S&P 500 is down 3.0 points (-0.28%) to 1,073.19. Oil ended up at $74.42 a barrel, while gold climbed another $8 to $1,065. The VIX was essentially unchanged at 22.99.
   
Intel exceeded analysts' expectations, suggesting that tomorrow's markets will rise. Intuitively, if this upsurge works like previous "waves", then it will go a little higher before there's a pullback. The problem is: once a pattern is discernible in the stock market, it generally doesn't last very long. More and more traders begin to "play the game", at which point, the pattern breaks down.
    Stock market futures are significantly elevated this evening.
    Michael Ashbaugh has written this,
U.S. benchmarks hesitate at the 2009 peak, today, concluding that unless that markets say otherwise, they're still moving up.
    Mark Hulbert offers this,
Mutual fund investors continue to favor bonds, and Peter Brimelow proffers this, Several letters see stocks having peaked.


2009-10-12:  The Dow and the S&P 500 are up a little yet again today, six days in a row. The NASDAQ Composite closed down 0.14 points, (-0.01%) to end at 2,139.14 (for all intents and purposes, unchanged), the Dow tacked on 20.86 points (0.21%) to finish at 9,885.80, which is another new high for the year, and the S&P 500 is up 4.7 points (0.44%) to 1,076.19, which is also a new high for the year. Oil ended at $72.99 a barrel, while gold climbed $9 to $1,058. The VIX dropped slightly to 23.01.
   
There isn't a whole lot of new news. Trading volume has been trailing off, and with the S&P and the Dow rising 6 days in a row, a breather ought to be expected. Top Stock Portfolios is becoming a little cautious for undoubtedly sound technical reasons. 


2009-10-10:  Top Stock Portfolios has observed today that although the markets have risen because things aren't as bad as they were... things are less worse... ultimately, consumer spending is going to have to pick up the slack, and that's not apt to happen for years. When the markets face that "moment of truth", there could well be a resumption of the bear market. At the same time, the indices have advanced sufficiently to resemble previous bull market peaks within long-term (16-year) bear markets. Things are OK for right now, but we should be psychologically ready for a resumption of the bear market when it occurs. (That would mean liquidating stocks and mutual funds.)
Later: The latest (October 19, 2009) issue of BusinessWeek argues that the aggressive cost-cutting that took place during "The Great Recession" will pave the way for continuing profits and earnings over the coming year or two. It projects 2010 earnings on the S&P 500 at $75 a share. At a P/E ratio of 16, this would support a 2010 S&P 500 level of 1,200. Of course, in 2010, the markets will begin anticipating 2011 earnings.
    We'll see.


2009-10-9:  The markets are up again today, making it five days in a row. The NASDAQ Composite closed up 15.35 points, (0.72%) to end at 2,139.28, the Dow tacked on 78.07 points (0.8%) to finish at 9,864.94, which is a new high for the year; and the S&P 500 gained 6.01 points (0.56%) to end at 1,071.49, which is also a new high for the year. Oil ended down slightly at $72.29 a barrel, while gold fell $8 to $1,049. The VIX fell to 23.12.


2009-10-8:  The markets moved up for the fourth day in a row. The NASDAQ Composite closed up 13.6 points, (0.64%) to end at 2,123.93, the Dow tacked on 61.39 points (0.63%) to finish at 9,786.87 and the S&P 500 gained 7.9 points (0.75%) to end at 1,065.48. Oil ended down slightly at $71.35 a barrel, while gold again hit a new all-time high (up $12) of  $1,056. The VIX fell to 24.18.
 
   So far, earnings news appears to be good. Mark Hulbert observes: Hulbert says short memories make earnings look good.
    One interesting tidbit: the World Economic Forum announced today that the US is now in third place as a world financial hub, behind the UK and Australia. In terms of perceived financial stability, the US now ranks 38th in the world, one notch below the UK which is in 37th place.
    Several investment advisory services are forecasting a stock market surge between now and the end of the year. At the same time, a couple of them are suggesting that another pullback or even a correction may be coming soon. As usual, the tape will tell the tale, and these services will tell when to sell and when to buy. Right now, they're still in a "buy" mode.


2009-10-7:  Today, the markets caught their breath. The NASDAQ Composite closed up 6.76 points, (0.32%) to end at 2,110.33, the Dow dropped 5.67 points (-0.06%) to finish at 9,725.58 and the S&P 500 gained 2.86 points (0.27%) to end at 1,057.58. Oil ended down slightly at $69.82 a barrel, while gold again hit a new all-time high (up $4) of  $1,044. The VIX fell to 24.67.
 
   This is consistent with a market digesting its gains, although it's also consistent with a market that has peaked and is rolling over. Only time will tell. Supposedly, the markets are waiting to see what when happen when the quarter's first earnings report comes from Alcoa after today's close. Alcoa is expected to post a loss for the third quarter, but to return to profitability in the current (fourth) quarter.
UpdateAlcoa has just reported a surprise profit that "signals that key markets are stabilizing". Barring unexpected bad news, this should bode well for tomorrow's market openings. Meanwhile, Mark Hulbert writes: Gold and bonds can't both go up forever. 
Still Later: Market futures are up smartly tonight, presaging a higher opening tomorrow, although what comes next will depend upon whether market continues to outperform expectations. Of course, third quarter-2008 earnings provide a low bar for comparison.
   
Commercial real estate may come around the bend as the next wave of financial crises to hit the fan. Paul Krugman is warning that the fiscal stimulus has been too small to lift the country out of its funk. Is this recovery sustainable? (I guess we'll find out.)


2009-10-6:  The market indices rose again today. The NASDAQ Composite added 35.42 points, (1.71%) to end at 2,103.57, the Dow reclaimed 131.5 points (1.37%) to finish at 9,731.25 and the S&P 500 gained 14.26 points (1.37%) to end at 1,054.32. Oil ended at $71.21 a barrel, while gold hit a new all-time high (up $22) of  $1,040. The VIX fell to 25.70.
 
   Stocks have now recovered about 60% of what they've lost over the past two weeks. A weaker dollar is credited with today's price increases, with rising commodity (including gold) prices. Also, Australia raised its interest rate ¼ % in anticipation of an improving economy.


2009-10-5:  The market indices rose today. The NASDAQ Composite added 20.04 points, (0.98%) to end at 2,068.15, the Dow reclaimed 111.85 points (1.18%) to finish at 9,599.75 and the S&P 500 gained 15.23 points (1.49%) to end at 1,040.44. Oil ended at $70.36 a barrel, while gold rose $14 to $1,018. The VIX fell to 26.90.
   
Peter Brimelow has written Despite setbacks, China bull gets more frisky, discussing Cabot's China and Emerging Markets Report, while Craig Stephen's Tipping point of West's decline, rise of East?.explores when and/or whether China, India, and other SE-Asian nations will, or have already taken over world economic leadership.
    Meanwhile, we'll have to see whether this bounce means that this 5% correction has run its course, or whether it will be followed by another down-leg in the markets. (The S&P 500 rose 17.6 points on September 28th, only to be followed by another four-day wave of selling.) One difference from the end of September: quarterly earnings reports are about to start flowing.


2009-10-4:  A word to the wise: two top-seeded technical advisory services are noting that in spite of pullbacks that may occur along the way--and they will sell if intermediate "sell" signals become convincing--the markets have given remarkably bullish, longer-term "buy" signals. In other words, don't sell yet.


2009-10-2:  The market indices eroded slightly further today. The NASDAQ Composite shrank 9.37 points, (-0.46%) to end at 2,048.11, the Dow dipped 21.61 points (-0.23%) to finish at 9,487.67 and the S&P 500 gave up 4.64 points (-0.45%) to end at 1,025,21. Oil ended at $69.68 a barrel, while gold rose a little to $1,004. The VIX climbed to 28.68.
    The Dow and the S&P 500 penetrated their 50-day moving averages, but closed marginally above them.
So far, the Top Stock Portfolios haven't issued a "sell" signal, although a "sell" signal is at the ready if the markets deteriorate further next week.


2009-10-1:  The market indices crashed today. The NASDAQ Composite tumbled 64.94 points, (-3.06%) to end at 2,057.48, the Dow dropped 203 points (-2.09%) to finish at 9,509.28 and the S&P 500 shed 27.23 points (-2,58%) to end at 1,029.85. Oil fell to $66.68 a barrel, while gold closed unchanged at $1,001. The VIX jumped to 28.27.
    Bad as it was today, it still didn't carry the indices down to their 50-day moving averages. I mentioned on Monday that so far, this looks like another "buy the dips" rally. But three down days later,
that assessment no longer looks so simple. The
Halter Index of Chinese stocks has sent a "sell" signal, although the Cabot China and Emerging Markets' stocks are still looking good. In the meantime, I expect to see a "sell" signal from Top Stock Portfolios, although that hasn't happened yet.


2009-9-29:  The market indices fell back a little today. The good news was that home starts were up for a third month in a row: Home prices rise for third straight month, signaling an upturn in the economy. The bad news was that consumer sentiment came in below what was expected: Consumers grow less confident. The NASDAQ Composite lost 6.7 points, (-0.31%) to end at 2,124.04, the Dow relinquished 21.69 points (-0.48%) to finish at 9,742.20 and the S&P 500 shed 2.37 points (-0.22%) to end at 1,060.61. Oil fell to $66.68 a barrel, while gold closed unchanged at $994. The VIX decreased 0.73 to 24.88.
    Michael Ashbaugh observes that market breadth was exceptional yesterday, and that the market uptrend is still intact, with the indices exhibiting higher highs and higher low: Uptrend intact, U.S. markets hold first support. Mark Hulbert points out that Contrarian analysis of stock market is upbeat. David Weidner suggests that Wall Street is setting up for its next bubble: Wellspring for the next bubble?, while Paul Farrell has issued this gloomy forecast: WWIII Population Wars- A 12-bomb equation.


2009-9-28:  The market indices were up sharply today. The NASDAQ Composite gained 39.82 points, (1.9%) to end at 2,130.74, the Dow added 124.17 points (1.28%) to finish at 9,789.36 and the S&P 500 piled on 18.6 points (1.78%) to end at 1,062.98. Oil rose to $66.84 a barrel, while gold closed at $994. The VIX decreased 0.73 to 24.88.
    Mergers and acquisitions were cited as the catalyst for today's advances.
    So far, this is looking like another "buy the dips" kind of stock market pullback.


2009-9-27:  Of course, nothing has changed since Friday, but two Sunday stock market advisory reports might be worth summarizing. One is from the Fidelity Group, and the other is from what I consider a flagship investment advisory service: Top Stock Portfolios.
    First, Friday was the last day that end-of-the-quarter stock purchases could be made by fund managers for window-dressing purposes. 
    Top Stock Portfolios' David Moenning observes that the Iranians, after agreeing yesterday to let the International Atomic Energy Agency inspect a recently discovered Iranian nuclear enrichment facility, fired a salvo of missiles this morning. Given the way the markets hate uncertainties, this might--or might not--weigh on them this week.
    Mr. Manning also points out that Federal Reserve Governor Kevin Warsh has just admonished the financial public that the Fed might have to start raising interest rates more aggressively than is customary. And whenever interest rates rise, stocks fall. Add to this the fact that the stock market has had only one pull back greater than 5% since March and we could be looking at a temporary retrenchment. (October is right behind September as a losing month for stocks. Think "October massacre".)
    We'll have to wait and see, but he's mentioning these potentialities to his readers.
    The Fidelity article suggests that growths in GDP following severe recessions tend to be quite sizable, since the full productive capacity of the economy is intact, and the economy has a lot of "catching-up" to do. It also helps that India and China have posted 7% and 8% growth rates in real GDP, respectively, for the second quarter. The article cites three medium-term concerns. First, with consumer spending generating about two-thirds of GDP, a chastened and fearful consumer may be slow to boost spending to 2007 levels. Second, economies tend to take longer to recover after financial crises. Third, the tamping-down of government stimulus will exert a cooling effect on the economy that must be offset by private (as in consumer) spending. 
    In spite of these concerns, Fidelity suggests that the unfolding recovery will be more robust than the consensus expects.


2009-9-25:  Today, the stock market dipped a little further, as predicted below, but dropped less than it had the preceding two days. It appears to be setting up for a rebound. And this is a bit worrisome. Whenever the markets become predictable, they don't stay that way long... just long enough to trap unwary investors who think they're spotted a predictable pattern. It's going to remain necessary to sell when the indices drop below their 25-day and/or their 50-day moving averages (along with other technical indicators). Right now, the 25-day moving average is sitting at about 1,038 and the 50-day average at about 1,012,5 for the S&P 500. The S&P closed today at 1,044.38 after dropping intra-day to 1,041.
    The NASDAQ Composite declined 16.69 points, (-0.79%) to end at 2,090.92, the Dow shaved off 42.25 points (-0.44%) to finish at 9,665.19 and the S&P 500 parted with 6.4 points (-0.61%) to end at 1,044.38. Oil fell to $66.09 a barrel, while gold shed another $7 to close at $992. The VIX increased 0.66 to 25.61.
    Monday should continue to be a good time to buy.
    Historically speaking, the stock market indices rose exceedingly rapidly from  March to May, and have risen very rapidly even since May (as may be seen below  in the S&P 500's 10-year chart.). At the same time, these indices had fallen last March 6th to their lowest levels (on a percentage basis) since the Great Depression.
    Since May 7th, the S&P 500 has been gaining at a rate of about 400 points a year. At that rate, it would be approaching its 2007 high in about a year. The rate of rise may well slow down as fund managers get their money placed. (The level of institutional cash should be an important indication of when this cyclical bull market has exhausted itself.) 
    The fact that this bear market has been so deep, and that most savvy investors are expecting the S&P to peak in the 1,250 to 1,350 range suggests to me that the market might  approach its 2000 and 2007 1,550 highs over the next two or three years before it runs its course. The Cabot Wealth Advisory newsletter predicts no greater than 5%-to-6% pullbacks between now and next February. This newsletter has registered unusually bullish stock market signals for the intermediate term. However, from a practical standpoint, the daily guidance from my investment advisory services (which I'll be sharing here every day) will be what informs my personal decisions to buy, sell, or hold. 
    Todd Harrison, former hedge fund manager and trader extraordinaire, while acknowledging that his forecast for a W-shaped market that is poised to descend fairly deeply has been a bit early, still anticipates this kind of decline in the not-too-distant future: Freaky Friday Potpourr:- The Hunt for Red October. As Todd Harrison says about himself, "Sometimes right, sometimes wrong, always honest." Here's what he had to say yesterday about buying the dips: Buy the Dip or Sink the Ship?
    My Cabot China and Emerging markets Report mentioned yesterday that the 25-day and 50-day moving averages for the Chinese Halter Index, .HXC, are now lying on top of each other (actually, the 25-day moving average has fallen below the 50-day moving average), and the Index is just above them. A "Sell" signal hasn't quite been triggered, and today's slight ½ % drop probably didn't tip the table, but it's a time to watch carefully as this Chinese saga unfolds.


2009-9-24:  I closed last Friday with: "Meanwhile, the indices are flattening out, which usually means a pullback within a few more trading sessions." Now, after falling about 2%, the indices may go a bit lower before (supposedly) they start another upward leg. Right now, though, they're comfortably above their 25-day and 50-day moving averages. 
    T
he NASDAQ Composite declined 23.81 points, (-1.12%) to end at 2,107.61, the Dow dropped 41.11 points (-0.42%) to finish at 9,707.44 and the S&P 500 fell back 10.09 points (-0.95%) to end at 1,050.78. Oil fell to $66.26 a barrel, while gold shed another $16 to close at $999. The VIX increased 1.46 to 24.95.
    This should be a good time to buy.


2009-9-18:  After yesterday's hearty gains, the indices have pulled back a little today. The NASDAQ Composite gained 6.11 points, (0.29%) to end at 2,132.86, the Dow added 36.28 points (0.37%) to finish at 9,820.20 and the S&P 500 rose 2.81 points (0.26%) to end at 1,068.30. Oil fell to $71.85 a barrel, while gold shed another $3 to close at $1,010. The VIX increased 0.27 to 23.92.
    Today was a quadruple witching day. Stock index futures, stock index options, stock options and single stock futures all expired today.
    Meanwhile, the indices are flattening out, which usually means a pullback within a few more trading sessions.


2009-9-17:  After yesterday's hearty gains, the indices have pulled back a little today. The NASDAQ Composite gave up 6.4 points, (-0.3%) to end at 2,126.75, the Dow backed off 7.79 points (-0.08%) to finish at 9,783.92 and the S&P 500 subtracted 3.27 points (-0.31%) to end at 1,065.49. Oil moved up slightly to $72.53 a barrel, while gold rose $7 to close at $1,014. The VIX fell 0.04 to 23.65.
    The financial news is beginning to tilt negative again:
Harrison assails conventional view. The news today seems to be quite good, although the real news that informs the markets often doesn't appear until later.
    In what to me is momentous news, the White House today abandoned the Bush Administration's missile defense plan that would have placed anti-missile missiles in Poland and the Czech Republic, opening the way to World War III and a nuclear holocaust. Russia had warned that if the U. S. persisted in its plans to erect a "ring of fire" (my expression) around Russia by 2012, Russia would respond with a pre-emptive strike that could include nuclear weapons. Russia's Prime Minister, Vladimir Putin, pointed out last year that the U. S. anti-missile defense wouldn't be effective against cruise missiles.
    Mark Hulbert: Bubbles aren't just for the stock market.


2009-9-16:  The major market indices have now climbed for 8 days out of 9. The NASDAQ Composite vaulted 30.51 points, (1.45%) to end at 2,133.15, the Dow leaped 108.3 points (1.12%) to finish at 9,791.71 and the S&P 500 added 16.13 points (1.53%) to end at 1,068.76. Oil moved up to $72.45 a barrel, while gold rose $14 to close at $1,020. The VIX increased 0.27 to 23.69.
   
Michael Ashbaugh argued this morning that the S&P 500 teeters on verge of a breakout. By tonight, that breakout had happened. The next line in the sand, according to Mr. Ashbaugh, is 1,106, or about 37 points above where the S&P 500 stands tonight.
    This article, Shares look to pent-up demand, attempts to explain this run-up. (This has been a pretty strong move.) Apparently, there's still a lot of institutional money sitting on the sidelines. At some point, performance anxiety has to set in as we approach the end of the third quarter.


2009-9-15:  The major market indices closed at new highs again today.. The NASDAQ Composite rose 10.86 points, (0.52%) to end at 2,102.64, the Dow added 56.61 points (0.59%) to finish at 9,683.41 and the S&P 500 added 3.29 points (0.31%) to end at 1,052.63. Oil climbed to $70.21 a barrel, while gold rose $5 to close at $1,006. The VIX lost 0.44 to 23.42.
    .Fed Chairman Bernanke announced today that the recession is over, but the recovery will be slow. The Empire State manufacturing index rose to pre-recession levels this month, and consumer confidence was better than expected.
    The stock market appears to be cresting another wave. My technical advisory service is nervously waiting to sell.


2009-9-14:  The Nasdaq and the S&P closed at new highs today, while the Dow fell marginally short of a new peak.. The NASDAQ Composite edged up 10.88 points, (0.52%) to end at 2,091.78, the Dow inched up 22.07 points (0.22%) to finish at 9,626.80 and the S&P 500 added 6.61 points (0.63%) to end at 1,049.34. Oil was virtually unchanged at $69.00 a barrel, while gold fell $5 to close at $1,001. The VIX lost 0.29 to 23.86.
    San Francisco Fed member Janet Yellen warns that the recovery may be U-shaped, with unemployment at high levels for years: Recovery at risk. However, sentiment levels are getting dangerously bullish: Advisers bullish about U.S., global stocks. Meanwhile, the markets are looking as though they're ready to catch their breath again, including the possibility of another significant pullback. (My technical advisory service is on alert for a "sell" signal again.).
    Meanwhile, the S&P 500 is inching toward 1,100.


2009-9-11:  Today, the markets paused to breathe, falling back just a tad. The NASDAQ Composite gave up 3.12 points, (-0.15%) to end at 2,080.90, the Dow dwindled 22.07 points (-0.23%) to finish at 9,605.41 and the S&P 500 added 1.41 points (-0.14%) to end at 1,042.73. Oil fell $2.65 to $69.12 a barrel, while gold jumped $10 to close at $1,006. The VIX rose 0.6 to 24.15.
    Consumer sentiment rose a little more than anticipated in August. 
   
We can now say that, in retrospect, the recent near market lasted about 18 months, from October 11, 2007, to March 6, 2009, with a peak-to-valley decline of
-56.8%. It's now down about -33%, meaning that it might be expected to rebound about 50% from here if it were to regain its 2007 peak value of 1,562.
-56.8%. It's now down about -33%, meaning that it might be expected to rebound about 50% from here if it were to regain its 2007 peak value of 1,562.
   
One very interesting article, Bull in good form, forecasts earnings on the S&P 500 to run $60 a share this year and $75 a share next year (2010). At an average price-to-earnings ratio of 16:1, that would justify a level of 960 on the S&P 500 for this year, and 1,200 for next year. But cyclical bull markets generally top at P/E ratios of 20:1-to-22:1. That would correspond to a level of 1,500 to 1,650 on the S&P 500 peaks next year. (Normally, these tops tend to occur during election years.) If the markets didn't reach their apogee until 2011 or 2012, the readings on the market indices could possibly move higher before they fall back again. On the other hand, we're in a super-bear market, so really high values probably aren't in the cards.
    In the one previous super-bear market with which I'm personally familiar, the Dow generally reprised its 1966 high or slightly exceeded it in January, 1973; January, 1977, and June,1981. However, inflation reduced the real value of an investment continuously from 1966 through the end of 1982.
    We may see higher stock market peaks than most forecasters are predicting, since circumstances have to reach the point where complacency and euphoria prevail. It's also worth noting (I think) that this has been the deepest bear market since the Great Depression. In emerging from the 2½-year 2000-2002 bear market, the indices continued to climb until 2007 even though they didn't ultimately rise any  higher than they did in 2000.
    The next super-bull market might be expected to germinate in 2014 to 2018.


2009-9-10:  The markets continued to climb again today, with all three indices closing above their recent highs. The NASDAQ Composite increased 23.63 points, (1.15%) to end at 2,084.02, the Dow gained 80.26 points (0.84%) to finish at 9,627.48 and the S&P 500 added 10.77 points (1.04%) to end at 1,044.14. Oil advanced to $72.29 a barrel, while gold was unchanged at $997. The VIX fell 0.77 to 23.55.
    Jobless claims came in a little better than expected today.
   
Yesterday's comments (below) are still relevant.
    "
My technical advisory service has re-visited the theme that we're in a secular bear market which may be expected to last for several more years, and that what we can expect in the interim are what it terms "mini-bull" markets (what I've termed "cyclical" bull and bear markets), with a downward long-term bias. It is looking for a move over the next year-or-less to 1,200-to-1,300 on the S&P 500. The service also supports that idea that there are emerging markets that are not mired in secular bear markets, and that these emerging markets (the BRIC countries) offer a chance at greater profits than the U. S. markets."


2009-9-9:  The markets are up again today, folks.. The NASDAQ Composite increased 22.62 points, (1.11%) to end at 2,060.39, the Dow gained 49.88 points (0.53%) to finish at 9,447.22 and the S&P 500 added 7.98 points (0.78%) to end at 1,033.37. Oil advanced to $71.69 a barrel, while gold moved back down $3 to $997. The VIX fell 1.3 to 24.32.
   
My technical advisory service has re-visited the theme that we're in a secular bear market which may be expected to last for several more years, and that what we can expect in the interim are what it terms "mini-bull" markets (what I've termed "cyclical" bull and bear markets), with a downward long-term bias. It is looking for a move over the next year-or-less to 1,200-to-1,300 on the S&P 500. The service also supports that idea that there are emerging markets that are not mired in secular bear markets, and that these emerging markets (the BRIC countries) offer a chance at greater profits than the U. S. markets.


2009-9-8:  The markets have jumped yet again. The NASDAQ Composite rose 18.99 points, (0.94%) to end at 2,037.77, the Dow gained 56.07 points (0.59%) to finish at 9,497.34 and the S&P 500 added 8.99 points (0.88%) to end at 1,025.39. Oil hopped up to $71.31 a barrel, while gold moved up $3 to $1,000. The VIX rose slightly to 25.62.

2009-9-8 (Early):
  My technical advisory service goofed. They're now giving a "buy" signal.


2009-9-4:  The markets have jumped again today. The NASDAQ Composite rose 35.58 points, (1.79%) to end at 2,018.78, the Dow climbed 96.66 points (1.03%) to finish at 9,441.27 and the S&P 500 shot up 13.16 points (1.31%) to end at 1,016.40. Oil was little-changed at $67.79 a barrel, while gold moved down $1 to $997. The VIX moved down 1.84 to 25.26.
    There was heavy buying in the last few minutes, although with little effect upon the markets.
    My technical advisory service is still entirely into holding cash or shorting the markets. My technical advisory service has observed that the trading day before Labor Day is generally an up day, while the day after Labor Day is usually a down day.


2009-9-3:  The markets have bounced today after the first four-day losing streak since March. The NASDAQ Composite rose 16.13 points, (0.82%) to end at 1,983.20, the Dow addeded 63.94 points (0.89%) to finish at 9,433.61 and the S&P 500 dropped 8.49 points (0.85%) to end at 1,003.24. Oil was little-changed at $68.19 a barrel, while gold added $19(!) to $998! The VIX moved down 1.8 to 23.10.
    For yet another day, there was heavy buying in the last few minutes, and this time, the markets soared.
    My technical advisory service is still entirely into holding cash or shorting the markets. My advice is still: raise cash.
    Meanwhile, Global rebound on tap?, Optimism sprouting over U.S. growth, and 5 reasons to be bullish


2009-9-2:  Today, the markets lost a little. The NASDAQ Composite fell 1.82 points, (-0.09%) to end at 1,967.07, the Dow dropped 29.93 points (-0.32%) to land at 9,280.67 and the S&P 500 dropped 3.29 points (-0.33%) to end at 994.75. Oil was little-changed $68.03 a barrel, while gold added $22(!) to $979. The VIX moved up 0.25 to 25.90.
    For the third day in a row, there was heavy buying in the last few minutes, but it was only enough to stop a free-fall.
    Today, my technical advisory service went entirely into holding cash or shorting the markets. My advice: raise cash.
    Among today's news: 
    Mark Hulbert points out the fact that the markets selling off on good news is an endorsement of the dictum: "Buy on the rumor; sell on the news." Stock market again sells on the good news. However, this article, Tax man gets blame for September woes, suggests that the fact that most funds' fiscal year ends at the end of September suggests that fund managers' needs to sell lagging stocks before the end of the fiscal year may have something to do with September's reputation as the worst month for equities in the year.


2009-9-1:  Today, the markets plunged. The NASDAQ Composite fell 40.17 points, (-2%) to end at 1,968.89, the Dow dropped 185.68 points (-1.96%) to land at 9,310.60 and the S&P 500 dropped 22.58 points (-2.21%) to end at 1,098.04. Oil declined $1.91 to $68.20 a barrel, while gold added $3 to $957. The VIX moved up 1.27 to 26.03.
    Again, there was heavy buying in the last few minutes, but it was only enough to stop a free-fall. 
    The news today was all good. So why did the markets tank? Mark Hulbert examines this question in his columns today and concludes that it's because September has such a dismal reputation that it's become a self-fulfilling prophecy: Hulbert: Flimsy rationale, What's Working for September. Mark Hulbert also offers Who's got the hot hands
    Michael Ashbaugh observes in two articles today: S&P, Dow violate first support, Ashbaugh coaches defense, that the long-term trend is still up.
    The markets are off about 4% from their recent highs.


2009-8-31:  Today, the bulls were thrown for a ten-yard loss. The NASDAQ Composite gave up 19.71 points, (-0.97%) to end at 2.009.06, the Dow lost 47.92 points (-0.5%) to ;and at 9,496.28 and the S&P 500 dropped 8.31 points (-0.81%) to end at 1,020.62. Oil plunged $2.78 to $69.65 a barrel, while gold subtracted $5 to $954. The VIX moved up 1.27 to 26.03.
 
   There was heavy buying at the close, but it wasn't enough to staunch the day's losses. Part of the problem is the anticipation that markets almost always fall in September. My technical advisory service has shifted its more conservative portfolio to cash, although its more aggressive portfolio is still fully invested..
    Meanwhile, the Halter Chinese index, HXC, has fallen below decisively below its 50-day moving average. Tonight, the Cabot China and Emerging Markets Report recommended selling one of its stocks, bringing its recommended portfolio to 30% cash..


2009-8-30:  The U. S. market indices are setting up like the early June indices before the June-July correction. The bears are licking their chops in anticipation of the approaching pullback. However, my technical advisory service suggests that there may be too many bull market signals and too much mutual fund performance anxiety cash to indulge the bears. In the meantime, the Halter Chinese index, HXC, is kissing its 50-day moving average. However, my Cabot China and Emerging Markets Report observes that the augurs are still positive, and until they turn negative, the Cabot recommendation will be to stay the course.
    Both situations bear watching.


2009-8-28:  Today, the Dow and the S&P have posted small losses, while the Nasdaq has registered a small gain. The NASDAQ Composite squeezed out 1.04 points, (0.05%) to close at 2.028.77, the Dow lost 36.43 points (-0.38%) to ;and at 9,544.20 and the S&P 500 fell 2.05 points (-0.2%) to end at 1,028.93. Oil moved up very slightly to $72.86 a barrel, while gold hit $959. The VIX drifted up 0.08 to 24.76. 
    Once again, there's very little news.


2009-8-27:  Once again, the markets have eked out small gains, with today's close rivaling the highs seen last Friday.. The NASDAQ Composite inched up 3.3 points, (0.16%) to close at 2.027.73, the Dow toddled up 37.11 points (0.39%) to settle at 9,543.52 and the S&P 500 rose 2.86 points (0.28%) to end at 1,030.98. Oil moved up to $72.75 a barrel, while gold hit $947. The VIX drifted down 0.23 to 24.72. 
    There's very little news. The Chinese markets are down, as the Chinese government takes steps to cool them.
    
Stock futures are neutral tonight.


2009-8-26:  The markets rose today by an amount measured in hundredths of a percent, making yesterday's "virtually unchanged" look like a seismic shift by comparison. The NASDAQ Composite rose by a laughably small (0.2 points, 0.01%) to close at 2.024.43, the Dow crept up 4.23 points (0.04%) to settle at 9,543.52 and the S&P 500 catapulted 0.12 points (0.01%) to end at 1,028.12. Oil oozed down to $71.53 a barrel, while gold was unchanged at $946. Not to be outdone, the VIX minced upward 0.03 to 24.95.
    I guess Wall Street must be on vacation. If
the working traders had foreseen this, they could have stayed in bed all day.
    There seems to be no other news tonight.
    Stock futures are down a small fraction of a percent tonight.


2009-8-25:  After advancing 5% in four trading sessions last week, the markets were overdue for a contraction or consolidation. Today, they ended the day virtually unchanged. The NASDAQ Composite rose slightly (6.25 points, 0.31%) to close at 2.024.23, the Dow closed up 30.01 points (0.32%) to settle at 9,539.29 and the S&P 500 added 2.43 points (-0.24%) to end at 1,028. Oil fell a little to $71.59 a barrel, while gold added $2 to $946. The VIX fell a bit to 24.92.
    There isn't really much to say. The markets are continuing to rise, albeit slowly at the moment. They're overbought, and at some point, they'll correct somewhat. Michael Ashbaugh has published his Tuesday technical analysis: Ashbaugh: Cleared resistance. As we know, the markets have moved up out of their recent rrading range. He
notes (1) that all three major indices have experienced 15-to-1 market breadth on the New York Stock Exchange, and (2) sector rotation is carrying the markets higher (which is bullish).

    Part of today's good news was that the Case-Schiller housing index has risen for the second month in a row, and the Conference Board's consumer confidence index rose to 54.1 in August... much higher than the 48.0 expected. This is the highest level of consumer confidence since the recession began.


2009-8-24:  After advancing 5% in four trading sessions last week, the markets were overdue for a contraction or consolidation. Today, they ended the day virtually unchanged. The NASDAQ Composite fell slightly (2.92 points, -1.59%) to close at 2.017.98, the Dow closed up 3.32 points (0.03%) to settle at 9,509.28 and the S&P 500 added 0.56 points (-0.05%) to end the week at 1,025.57. Oil closed at $72.35 a barrel, while gold fell $11 to $944. The VIX rose ever so slightly to 25.14.
    Tomorrow is "turnaround Tuesday" so the markets will probably fall back.
    President Obama will reappoint Fed Chairman Ben Bernanke to a second term as chairman of the Federal Reserve Board.

    The U. S. economy was still shrinking in July.


2009-8-23:  I should have mentioned below that last week was options expiration week, and that this could possibly have skewed the markets.
   For what little it might mean, stock market futures are up a bit tonight.


2009-8-21:  The markets galloped to new highs today.  The NASDAQ Composite advanced 31.68 points (1.59%) to close at 2.020.90, the Dow closed up 155.91 points (1.67%) to settle at 9,505.96 and the S&P 500 added 18.76 points (1.86%) to end the week at 1,026.13. Oil closed at $72.35 a barrel, while gold fell $13 to $955. The VIX declined ever so slightly to 25.01.
    There was exceptionally good news today. Existing-home sales have now risen for four months in a row, with last month's sales at a two-year high. Also, Fed Chairman Bernanke said today that the Fed and other central banks saved the world from "devastation". Meanwhile, unemployment levels continue to rise; Paul Krugman points out that the last several recessions have had "jobless" recoveries in which it can take two years before employment rates pick up substantially: Permanent Link to The answer is yes.
    Of course, the question is always, "What happens next?", but in this news-driven market environment, perhaps we're at the mercy of what the news will bring. Longer-term, though, there now seems to me to be general agreement among leading economists that a recovery is on its way.


2009-8-20:  Here we are The markets advanced for a third day in a row. The NASDAQ Composite rose another 19.98 points (1.01%) to close at 1,989.22, the Dow climbed 70.89 points (0.76%) to settle at 9,350.05 and the S&P 500 tacked on 10.91 points (1.09%) to end at 1,007.37. Oil closed at $72.35 a barrel, while gold fell $3 to $942. The VIX backed off to 25.09.
   
The Conference Board' Index of Leading Indicators has risen for the fourth month in a row, leading the Board to suggest that the recession is bottoming out, and that an economic recovery may begin soon.. Their Index of Coincident Indicators was unchanged in July, following eight months of declining readings.
    Stock futures are very slightly negative tonight.


2009-8-20 (Morning):
  Here we are again with market indices inching their way higher.
    The sharp drop in the Chinese markets on Monday from about 41.75 to about 39 for the FXI index was triggered by rumors that the Chinese government is moving to block the development of a bubble in Chinese stock prices. Since then, the FXI index has risen to 40.4, still off from its August 3rd peak of 43.67, but up a bit from its close at 39.132 on Monday.
    The rise in the S&P 500 from its Monday low of about 979 to its present value of 1,003 or about 15 points below its August 7th top at 1,018.is being attributed to the fact that oil inventories have fallen, suggesting that world demand for oil is rising. (It probably doesn't hurt that the International Monetary Fund has announced that the world is pulling out of recession.) Added to that is a rumor that the White House is planning to announce another round of stimulus spending.


2009-8-19:  The markets advanced modestly again today. The NASDAQ Composite rose another 13.32 points (0.68%) to close at 1,969.24, the Dow climbed 82.6 points (0.9%) to settle at 9,217.94 and the S&P 500 tacked on 6.79 points (0.69%) to end at 996.46. Oil closed at $72.50 a barrel, while gold rose $6 to $945. The VIX added 0.08 to close at 26.26.
    My investment advisory service continues to recommend buying on the dips.
    Stock futures tonight are neutral.


2009-8-18:  "Turnaround Tuesday" lived up to its reputation , with the NASDAQ Composite up about 25.08 points (1.3%) to close at 1,955.92, the Dow rising 82.6 points (0.9%) to settle at 9,217.94 and the S&P 500 increasing 9.94 points (-1,01%) to end at 989.67. Oil closed at $69.99 a barrel, while gold rose $3 to $939. The VIX fell 1.71 to 26.18.
    My investment advisory service says that it's nearly certain that the markets will rebound to their recent highs, but after that, it's anybody's ball game. They are looking for an additional 20% from here, which would take the S&P 500 to about 1,200, the Dow to about 12,000, and the NASDAQ to 2,400, after which the behavior of the markets will depend upon the shape of the recovery--V-xhaped, U-shaped, W-shaped, or L-shaped. Also pertinent to this is the fact that September is the worst month of the year for equities.
    Meanwhile, "an increasing count of analysts say the recent turn in equities has more to do with overbought conditions than much else": What goes up must come down.
    After tomorrow's close, I'll get an update from the China and Emerging Markets Report regarding the Chinese marketplace. 


2009-8-17:  The markets closed close to this morning's early values, with the NASDAQ Composite about 54.68 points underwater (-2.75%) to close at 1,930.84, the Dow dipping 186.06 points (-2%) to land at 9,135.34 and the S&P 500 divesting itself of 24.36 points (-2.43%) to end at 979.73. Oil dropped $0.76 to close at $66.78 a barrel, while gold declined $13 to $936. The VIX finally got a little perturbed, rising 3.62 to 27.89.
    My investment advisory service considers this drawdown to probably be no more than a routine correction after a fast-and-furious run-up in July. Of course, the markets set the rules, but so far, there's nothing overwhelming in the numbers.
    Tomorrow is "Turnround Tuesday".

2009-8-17 (Morning): 
The The markets are off to a grim start this morning. The Chinese market closed today (Monday) down -5.8% (think 58 points on the S&P 500), penetrating its 25-day moving average (as it did on August 6th), but not its 50-day MA. Meanwhile, back at the ranch, at this moment, the S&P is down 24, the Dow is down 190, and the Nasdaq Composite is underwater about 48 points. At the same time, S&P has just broached its 25-day moving average, as it did in the June-July contraction, when it broke all the way down to its 85-day MA.
    The news this morning is good. The Empire Manufacturing index registered about 12, versus an expected value of 3, But the market indices are all ready to pull back, and apparently, it's now happening. My technical advisory service' advice at the moment is still "buy on dips", although that could change as this correction evolves.
What to do? It's too late to sell and too early to buy.


2009-8-14:  The indices retreated today. The NASDAQ Composite pulled back 23.83 points (-1.19%) to close at 1,985.53, the Dow doffed 76.79 points (-0.82%) to close at 9,321.40 and the S&P 500 parted with 8.64 points (-0.85%) to end at 1,004.09. Oil dropped $3.01 to close at $67.58 a barrel, while gold declined $8 to $949. The VIX dropped 0.44 to 24.27. 
    There was a heavy spate of buying in the closing minutes of the day... institutional investors buying on the dip?
    One of the downers for the day was the fact that consumer optimism dropped instead of rising, implying that consumers aren't about to start spending like it's 2007.
    The Chinese marketplace, although it has consolidated for the past week-and-a-half, is still above its 25-day moving average, and well above its 50-day moving average. The Cabot China and Emerging Markets Report is still on full-steam-ahead.
    Now is a time to sit and watch to see whether the markets are going break down or up. My investment advisory service notes that the markets are trading again in a range.
    The Cabot newsletter is very bullish, looking for a major rise in the markets over the next year or two in spite of the doom and gloom proffered by the media.


2009-8-13:  The indices advanced again today. The NASDAQ Composite rose 10.63 points (0.58%) to close at 1,009,65, the Dow accumulated 35.97 points (0.38%) to close at 9,397.58 and the S&P 500 added 6.91 points (0.69%) to end at 1,012.72. Oil closed up at $70.99 a barrel, while gold increased $4 to $957. The VIX dropped 0.63 to 25.82. 
    My technical advisory service is noting the way the current pattern resembles that of this June, when the stock market topped and corrected. It is anticipating a breakout either up or down. Meanwhile, the S&P 500 and the Dow have closed at new highs, while the NASDAQ has failed to confirm it. All three indices have "rolled over" to create  At the same time, retail spending numbers were disappointing, with the "cash for clunkers" program diverting money from other consumer purchases to cars. At the same time, jobless numbers were up a bit beyond expectations.
    The Chinese marketplace, although it has consolidated for the past week-and-a-half, is still above its 25-day moving average, and well above its 50-day moving average. The Cabot China and Emerging Markets Report is still on full steam ahead.
    Now is a time to sit and watch to see whether the markets are going break down or up.


2009-8-12:  The indices rebounded today. The NASDAQ Composite rose 28.99 points (1.47%) to close at 1,998.72, the Dow expanded 120.16 points (1.3%) to close at 9,361.61 and the S&P 500 added 11.46 points (1.15%) to end at 1,005.81. Oil closed up at $70.67 a barrel, while gold increased $% to $948. The VIX dropped 0.54 to 25.45. 
    Fund managers are back to buying the dips. 
    Here are two articles, pro and con, regarding whether or not the Chinese stock market is reaching bubble proportions. The 'pro-bubble' view, and Blowing bubble (video). Looking at this myself and using FXI as a stand-in for the Chinese stock market, FXI bottomed at about 20 on October 27, 2008. From there. it has slightly more than doubled to 41.54 as of today's close. This puts it, after correcting for dividends, about where it was at the peak in July, 2007. From there, after dipping in August, 2007, it soared to a "blow-off" top of about 70 on October 31, 2007, working its way down to 20 a year later. In other words, where the U. S. markets dropped by about 50% to their March, 2009, lows, the Chinese markets fell roughly 70% from their October, 2007, peaks... a factor of more than 3:1. By October, 2009, the Chinese GDP will have risen by about 20% from its October, 2007 level, so there's headroom for a modest increase in the Chinese indices before reaching the same effective level they attained in 2007. Still, you can see a case for a Chinese bubble.


2009-8-11:  The indices declined again today. The NASDAQ Composite fell 22.51 points (-1.13%) to close at 1,969.73, the Dow shrank 96.5 points (-1.03%) to close at 9,241.45 and the S&P 500 dropped 12.75 points (-1.27%) to end at 994.35. Oil fell to $69.36 a barrel, while gold doffed $13 was unchanged at $948. The VIX ended the day up at 25.99. 
    The news is quite negative, in keeping with a falling market... which brings us to the question: which comes first: the bad news or the falling markets? Given the obscure gurus whom the media quote to get a foreboding forecast, I'm inclined toward the idea that the bad news is what comes first. Be that as it may, the markets are overextended after their rapid recent run-up, and a retrenchment is in order.
    My investment advisory service is warning of a technical breakdown in the NASDAQ Composite index, which failed to confirm the recent highs in the Dow ad the S&P 500. It called for a wait-and-see stance regarding whether investors bought on the dip today. (My guess is that they didn't, but I should hear more about that in the morning.)
    Michael Ashbaugh's Tuesday technical analysis, S&P 500 hesitates at major resistance, opines that this rally still has legs. (He treats the technical breakdown in the NASDAQ Composite as simply a range-bound correction after a momentous run-up.) Another analyst argues that the Rally has 'just begun' (video). (One of his encouraging indications is the fear and pessimism that's allowing these markets to "climb a wall of worry".) The Forecaster of the Month: Slow, steady recovery. And finally, Paul Farrell, in Forecasting next meltdown, predicts a stock market rise during 2010 and 2011, followed by an even greater meltdown in 2012 than the current 2008-2009 debacle.
    On the commodities front, China's material imports at record.


2009-8-10:  The indices backed away modestly today. The NASDAQ Composite fell 8.01 points (-0.4%) to close at 1,992.04, the Dow shrank 32.12 points (-0.34%) to close at 9,337.95 and the S&P 500 dropped 3.38 points (-.33%) to end at 1,007.18. Oil closed up slightly at $70.93 a barrel, while gold doffed $13 again to end at $947. The VIX ended the day up at 24.99. 
    Meanwhile, Peter Brimelow writes: Aden sisters stick with stocks for short term, and elsewhere, Dow Theory sending buy signals.


2009-8-7:  The indices hopped to new highs today. The NASDAQ Composite rose 27.09 points (1.37%) to close at 2,000.25, the Dow climbed 113.81 points (1.23%) to close at 9,370.07 and the S&P 500 vaulted 13.4 points (1.34%) to end at 1,010.48. Oil closed down slightly at $70.57 a barrel, while gold doffed $3 again to end at $960. The VIX ended the day at 24.76. 
    Mark Hulbert has reported today on Four signs to watch for the rally's end. Ned Davis, publisher of Ned Davis Research, uses four criteria to determine when a rally has peaked.
(1) When the P/E ratio on the S&P 500's normalized (adjusted for stage of the economic cycle) reaches 20. Right now, he estimates the S&P's normalized earnings at about $60 a share, so an S&P level of 1,200 would be required to trigger a sell signal.
(2) Ned Davis proprietary sentiment index stands at 62, which is incrementally above Mr. Davis' threshold of "extreme optimism". Typically, it will rise to 68 before subsiding.
(3) The Fosback "High-Low Logic Index". This index is currently at 0.8%; it would have to reach 2.5% to begin pointing to the exits.
(4) Rising interest rates. The 26-week rate of change for investment-grade bonds is currently falling at a 12.6% rate. When it starts rising, this would flash a sell  signal. 
    In the meantime, the 200-day moving averages for all the indices are starting to move up.
    Right now, I'm fishing for January, 2011, $30 calls, ZYLAF, on the exchange-traded fund, EWZ, and January, 2011, $10 calls, ZVLAB, on the Chinese solar power company, Suntech Power Systems, STP. I'm looking for a pullback to stock up on these. The Wilderhill Green Energy Technology Fund, PBW, is also a favorite of mine, but long-term options aren't available on it. I also own modest positions in the solar energy ETF, TAN, and in the wind-energy ETF, FAN. (So far, both of these are underwater.) I've sold my 30 shares of First Solar at a profit. I'm a bit concerned about the long-term safety of the cadmium telluride used in First Solar's solar cells.
    I'm depending upon the Cabot China and Emerging Markets Report for my Chinese investments. There's some possibility that a bubble might be forming in Chinese stocks, so I'm trying to diversify into other BRIC countries such as Brazil and India.


2009-8-6:  The indices fell  back a little more today. The NASDAQ Composite lost 23.44 points (-1%) to close at 1.973.16, the Dow dropped 24.71 points (-0.27%) to close at 9,256.26 and the S&P 500 lost 5.64 points (-0.56%) to end at 1,997.08. Oil closed down slightly at $71.59 a barrel, while gold doffed $3 to end at $963. The VIX ended the day at 25.67.


2009-8-5:  The indices fell back a little today.  The Nasdaq gained 2.7 points (0.13%) to close at 2,011.31, while the S&P 500 closed above 1,000.  The NASDAQ Composite lost 18.26 points (-0.91%) to close at 1.993.05, the Dow dropped 39.32 points (-0.47%) to close at 9,280.97 and the S&P 500 lost -2.93 points (-0.29%) to end at 1,002.72. Oil closed down slightly at $71.77 a barrel, while gold doffed $3 to end at $966. The VIX ended the day at 24.90.
    No real news today. The real question is: what to buy, and when to buy it? A pullback will come when I have thrown in the towel and given up on a market pullback. (I'm an excellent contrary indicator.) So far, though, every dip is an invitation to buy. Right now, I'm angling for January, 2011, $30 calls on the Exchange Traded Brazil Fund, EWZ. (ZYLAF)
Chart
 I'm also interested in purchasing shares in the Wilderhill Clean Energy Technology Fund, PBW
Chart
    I believe it's time to start buying January, 2011, calls.


2009-8-4:  The indices rose slightly on heavy trading at the end of the day. The Nasdaq gained 2.7 points (0.13%) to close at 2,011.31, while the S&P 500 closed above 1,000.  The NASDAQ Composite gained 2.7 points (0.13%) to close at 2,011.31, the Dow climbed 33.63 points (0.36%) to close at 9,320.19 and the S&P 500 rose 3.02 points (0.3%) to end at 1,005.65. Oil closed up at $71.82 a barrel, while gold added $11 to end at $970. The VIX fell 0.67 to 24.89.
    After an unscheduled column yesterday, Michael Ashbaugh has published his regular Tuesday technical column today: Technical Indicator: S&P 500, Nasdaq party like it's 1998. He notes that the NASDAQ and the S&P 500 closed above 2000 and 1,000, respectively, for the first times in 1998. Buy-and-hold investors who bought in 1998 have lost money (through inflation) over the 11-year period. (By the same token, given the long-term 6.8%-a-year inflation-corrected rate of return on the S&P 500, sooner or later, the markets will explode upward, making up for lost time. By now, the markets should double to 2,000 on the S&P 500 and 4,000 on the Nasdaq Composite in inflation-corrected terms.)
     Mr. Ashbaugh concludes that the indices are primed for a pullback. However, a lot of investors are waiting for a pullback, and the markets generally don't do what's expected of them.


2009-8-3:  The Nasdaq powered past the 2,000 mark today, while the S&P 500 closed above 1,000.  The NASDAQ Composite gained 30.11 points (1.52%) to 2,008.61, the Dow climbed 114.95 points (1.25%) to close at 9,286.56 and the S&P 500 rose 15.15 points (1.53%) to end at 1,002.63. Oil closed up at $71.41 a barrel, while gold added $3 to end at $959. The VIX fell 0.36 to 25.56.
    The boost today came from the Institute for Supply Management's index report for July: ISM factory index shows improving manufacturing sector. Also, Job destruction storm petering out. Michael Ashbaugh gave an impromptu technical analysis this morning: Important leadership groups begin to stir.
    Tomorrow is "Turnaround Tuesday". It would come as no surprise if the markets pulled back somewhat after breaking to new highs. Still, as Keynes famously said, "The markets can remain irrational longer than you can remain solvent." By and large, though, it's time to buy.
    I have been exploring the American Association of Individual Investors' stock screens. One screen that rivals the O'Shaughnessy Tiny Titans and O'Neil's CAN SLIM is Earnings Estimate Revisions Up >5%. More about this when I've had time to explore it further.


2009-7-31:  The markets marched in place today. The NASDAQ Composite subtracted 5.8 points (-0.29%) to -0.29%) to 1,978.50, the Dow pulled ahead 17.15 points (0.19%) to close at 9,171.61, and the S&P 500 rose 0.79 points (0.07%) to end at 987.48 ... 13 points shy of 1,000. Oil rose precipitously to $69.50 a barrel, while gold soared $19 to $956. The VIX climbed 0.52 to 25.92.

2009-7-31 (early Afternoon): 
BIG NEWS! Although the first quarter's GDP change was revised downward to -6.4%, the initial number for the second quarter was -1.0%... better than consensus forecasts, and dramatically better than the first quarter's loss. This suggests to me that the GDP was still falling at the beginning of the second quarter, and could have been rising slightly by the end of the second quarter.
    On the other had, consumer consumption dropped at a 1.2% rate in the second quarter, "slicing 0.88% from the GDP". But "business investment decreased at an 8.9 percent rate in the second quarter after diving 39.2 percent in the previous quarter".
    In the meantime, here is an article telling why you shouldn't invest money in this bull market: Buyer Beware, The Bottom Is Not Yet In. To me, this is a part of the "stock market climbs a wall of worry" mantra. In effect, the author is presenting himself as the world's leading economist, since this is a call on the future behavior of the economy.
    Meanwhile, former Merrill Lynch Chief Economist Jack Lavery predicts that the economy will bottom in August, and will start back up in September: Economic Recovery to Begin in September.
    Things are getting better, with the S&P 500 down
37% from its 2007 peak.
    It may be time to note who's been right and who's been wrong in predicting last spring where the economy was headed. Paul Krugman and Todd Harrison (and I, who leaned in their direction) were wrong. I thought the economy would probably show a
6+ % drop in the second quarter rather than the 1.6% drop that some bullish forecasters were prognosticating. Todd Harrison thought we were on the "widow's peak" of a "W-shaped" market last spring. It didn't happen. Some day it will, since the stock market is one long string of peaks and valleys, but timing was  all-important in such a prediction. On the other hand, Cabot's China and Emerging markets Report got it right, as did my technical advisory service.
    The averages have broken out of their trading ranges, they are well above their 50-day and 200-day moving averages, and their 200-day moving averages are turning up.


2009-7-30:  The markets gained today. The NASDAQ Composite added 16.54 points (0.84%) to 1,984.30, the Dow pulled ahead 83.74 points (0.92%) to close at 9,154.46, and the S&P 500 rose 11.6 points (1.19%) to end at 986.75 ... 13 points shy of 1,000. Oil rose precipitously to $66.81 a barrel, while gold dropped $8 to $937. The VIX climbed 0.21 to 25.40.
   
The indices gave up about half their gains in the last half-hour of trading, with heavy trading going into the close. Prior to that, the NASDAQ surmounted the 2,000 level, and the S&P 500 closed in on 1,000.
    There's a paucity of news today, but the averages have broken out of their trading ranges, are well above their 50-day and 200-day moving averages, and their 200-day moving averages are turning up.


2009-7-29:  The markets fell today.
     
   The NASDAQ Composite contracted 7,75 points (-0.39%) to 1,967.76, the Dow dropped 26 points (-0.29%) to close at 9,070.72, and the S&P 500 declined 4.47 points (-0.46%) to end at 975.15 ... 25 points shy of 1,000. Oil fell precipitously $3.88 to $62.93 a barrel, while gold dropped $12 to $930. The VIX climbed 0.6 to 25.61.
   
PIMCO's co-CEO, Mohamed El-
Erian, said today that the stock market is on a "sugar high", fed by public debt. I think that the indices have been overbought short-term, and slightly overbought intermediate-term. A slight pullback is in order. And pullbacks are always accompanied by (and perhaps caused by) glum economic news.
    Here's another thought-provoking article: China, U. S., Look Like Another Bubble in the Making. This article points to the wild and woolly moves by the Chinese government to stimulate its economy. Personally, I'm counting on the China and Emerging Markets Report to guide my footsteps in dealing with the Chinese and emerging markets stock markets.


2009-7-28:  Today, the last-minute scramble to buy stocks didn't take place.
     
   The NASDAQ Composite rose 7.62 points (0.39%) to 1,975.51, the Dow dropped 11.79 points (-0.13%) to close at 9,096.72, and the S&P 500 lost 2.56 points (-0.26%) to end at 979.62 ... 20 points shy of 1,000. Oil ended the day down at $66.73 a barrel, while gold dropped to $942. The VIX climbed 0.73 to 25.01.
   
Michael Ashbaugh: Technical Indicator: Bullish longer-term view
    My technical advisory service advises: Stay the course.   


2009-7-27:  Right on schedule, in the last few minutes of the trading day, heavy buying drove the indices into positive territory.
 
   The NASDAQ Composite rose 7.64 points (0.1%) to 1,967.65, the Dow gained 15.27 points (0.17%) to close at 9,108.51, and the S&P 500 added 2.92 points (0.3%) to end at 982.18 ... 18 points shy of 1,000. Oil ended the day up at $68.32.4 a barrel, while gold ended at $956. The VIX climbed 1.19 to 24.28.
    My technical advisory service is observing that the fact that the NASDAQ has risen so far so fast doesn't mean, as we might suppose, that it's ripe for a correction. On the contrary, the most likely move ahead is still up. At the same time, the markets are very overbought short-term, and somewhat overbought intermediate-term.
    I find myself wondering now that we're essentially sure that the economy is going to bottom in the third quarter and begin a slow recovery, isn't this already priced into the markets? How much farther will the markets rise before there's a major correction? ("Buy on the rumor; sell on the news.")


2009-7-24:  Again today, there was a flurry of buying into the close, boosting the DOw and the S&P 500 into the black. If there were a plunge protection team, this is how it would work. By buying just before the close, it would be possible to "move the markets" on relatively low volume. Then by holding the stocks for a while, it should be possible to unload them without necessarily losing money.
    The NASDAQ Composite 7.64 points (-0.39%) to 1,965.06, the Dow expanded 23.95 points (0.262%) to close at 9,093.24, and the S&P 500 added unto itself 2.97 points (0.3%) to end at 979.26 ... 21 points shy of 1,000. Oil ended the day up at $68.4 a barrel, while gold lost $2 to $953. The VIX fell negligibly 0.21 to 23.13, to close at a new lowest level since September, 2008.
2009-7-24 (Early Afternoon): 
After 13 "up" days in a row, the markets appear to be taking a little breather. Still, institutions are buying on dips. The markets' resilience to downturns is impressive. On the other hand, they are definitely overbought, and a short-term correction appears to be in the cards.


2009-7-23: 
    The NASDAQ Composite gained
47.22 points (2.45%) to 1,973.60, the Dow expanded 188.03 points (
2.12%) to close at 9,069.29, and the S&P 500 added unto itself 22.22 points (2.33%) to end at 976.29 ... 24 points shy of 1,000. Oil ended the day up slightly at $66.68 a barrel, while gold added
24 points shy of 1,000. Oil ended the day up slightly at $66.68 a barrel, while gold added $2 to $955. The VIX fell negligibly 0.04 to 23.38, to close at its lowest level since September, 2008... slightly enough to, possibly, allow this rally to continue.
    And yet again, there was dramatic buying in the last few minutes of the day. (Is this the "Plunge Protection Team" in action?)
    This rise has been occurring on steadily rising volume. At the same time, volume hasn't been huge. It seems to me that this has been a bit of a stealth rally. Clearly, though, the markets have blasted through their resistance levels--950 for the S&P 500--and have broken out of their 2½-month trading ranges. The Cabot China and Emerging Markets Report is very upbeat about China, where the 200-day moving average is beginning to turn up. It would seem that it's become time to buy again. The question then becomes: what to buy? I won't be able to tackle that question tonight.


2009-7-22:  Today, the markets basically wandered around, which is hardly a surprise given yesterday's performance. Still, the markets haven't yet staged a convincing breakout, and are now overbought on both a short-term and intermediate-term basis.
    The NASDAQ Composite gained
10.18 points (0.53%) to 1,926.38, the Dow contracted 34.68 points (-0.39%) to close at 1.26, and the S&P 500 divested itself of -0.51 points (-0.05%) to end at 954.07  Oil ended the day up slightly at $65.33 a barrel, while gold added $6 to $953. The VIX remained fell 0.46 to 23.42, to close at its lowest level since September, 2008.
    Once again, there was dramatic buying in the last few minutes of the day. (Is this the "Plunge Protection Team" in action?)

2009-7-22 (Morning): 
My computer ate the rest of my updates last night.
    My investment advisory service is warning that the markets are significantly overbought, and that a short-term pullback is imminent. The markets have advanced about 10% in the past two weeks, and that's too fast for safety and stability.


2009-7-21:  The markets rose again today on heavy volume. The NASDAQ Composite gained 6.91 points (0.36%) to 1,916.20, the Dow expanded 67.79 points (0.77%) to close at 8,915.94, and the S&P 500 rose 3.45 points (0.36%) to end at 954.58  Oil ended the day up slightly at $64.81 a barrel, while gold lost $2 to $947. The VIX remained fell 0.53 to 23.87, to close at its lowest level since September, 2008.
 
   The S&P 500 closed today at its highest level since last September. There was a heavy buying surge at the close again today


2009-7-20:  The markets climbed today to challenge their resistance levels, with huge buying at the close. The NASDAQ Composite gained 22.68 points (1.2%) to 1,909.29, the Dow expanded 104.21 points (1.19%) to close at 8,848.15, and the S&P 500 rose 10.75 points (1.14%) to end at 951.13  Oil ended the day up slightly at $64.15 a barrel, while gold lost $11 to $949. The VIX remained essentially unchanged at 24.40.
   
Today's rise was on decent volume. The VIX actually rose minutely, which is a good sign from a contrarian perspective. We'll soon see whether the averages break out of their recent trading ranges. The Chinese indices are looking good, with their 200-day moving averages beginning to turn up. 


2009-7-17:  The markets marched in place today.  The NASDAQ Composite gained 1.58 points (0.08%) to 1,886.61, the Dow added  32.12 points (0.37%) to close at 8,743.94, and the S&P 500 fell 0.36 points (-0.04%) to end at 940.38  Oil ended the day up slightly at $63.37 a barrel, while gold lost $2 to $938. The VIX fell 1.08 to 24.34.
   
The volume during this market advance has been good but not great. (My technical advisory service this morning pointed that out.) At this point, the market could go up or down. My Chinese stocks jumped a percent or two today. 
    The next problem area is tipped to be in commercial real estate. Apparently, this is returning to the news.
    In Boiling the Frog, Paul Krugman observes that the U. S. managed to sidestep a second Great Depression by pouring money into the banks. Now that the initial crisis has passed, though, the government seems to be leaning back in the saddle at a time when it's become evident that a second stimulus package is going to be needed to keep the economy afloat.
    This situation is even worse when it comes to climate change. The forecasts are becoming catastrophic. Meanwhile, the nation drifts.
    This brings up a point: the same disinformation strategies mounted by powerful industrial lobbies that were so successful in postponing the linking of cholesterol intake with heart disease, and the linking of smoking with lung cancer are now being used by companies like Exxon Mobil to discredit the connection between global warming and the burning of fossil fuels. It's very easy to run a calculation of the total amount of carbon dioxide in the atmosphere (about 387 parts per million, or 3 trillion tonnes) with the buildup of carbon dioxide since the first measurements were made in 1958, and to compare the total amount of carbon dioxide generated by deforestation and by the coal and oil that have been burned over the past two centuries (about 1 trillion tonnes). You find out in a hurry that the carbon dioxide produced by fossil fuels roughly matches the carbon dioxide added to the Earth's atmosphere. 
    The "experts" who are testifying that global warming isn't real include the same "experts" who testified years ago that smoking wasn't harmful to your health. (Half a century ago, I had a rude awakening with one of these "experts". We didn't have any conflicts... I was a lowly graduate student... but I got a close-up look at what he was like.) In Permanent Link to Opinions for sale, Paul Krugman warns,
"Despite everything that’s happened, I don’t think many people grasp just how raw, how explicit, the corruption of our institutions has become."


2009-7-16:  The indices rose approximately 1% today, with part of the rise attributed to economist Nouriel Roubini ("Dr. Doom"). Dr. Roubini is calling for an end to the recession by year's end, as has been the case from the get-go. The NASDAQ Composite gained 22.13 points (1.19%) to 1,885.03, the Dow added  95.61 points (1.11%) to close at 8,711.82, and the S&P 500 advanced 8.06 points (0.86%) to end at 940.74  Oil ended the day up slightly at $62.15 a barrel, while gold lost $4 to $934. The VIX dropped 0.47 to 25.42.
   
The Cabot China and Emerging Markets Report was tossing its horns tonight, and recommending two new stocks.

2009-7-16 (Early Afternoon): 
My investment advisory service still cautions that stocks may be trading in a trading range, and that there is strong overhead resistance waiting at 950. In the meantime, I have just read an updated economic forecast from Zacks.com. The unemployment rate currently stands at 9.5%. Zacks is predicting that before this downturn ends, unemployment rates will peak at 9.6%, with the economy bottoming this quarter, and starting slowly back up next quarter. Their forecast of eventual 9.6% unemployment floors me. Do they think that the unemployment rate is going to drop to zero within the next week or so? Even at the present level of initial jobless claims, the unemployment rate should hit 9.6% within two weeks. Only a step-function fall to zero two weeks from now, followed by no additional layoffs for the rest of this year and 2010 and 2011, would hold the unemployment rate to 9.6%.
    It doesn't give you a whole lot of confidence in their other prognostications.
    With the markets digesting yesterday's gains, it's not hard to sit on the sidelines today and wait to see what's going to happen next.


2009-7-15:  The markets rose by leaps and bounds again today. The NASDAQ Composite rose 63.17 points (3.51%) to 1,862.90, the Dow expanded  256.72 points (3.07%) to close at 8,616.21, and the S&P 500 took on 26.84 points (2.96%) to end at 932.68  Oil ended the day at $62.00 a barrel, while gold was up $17 to $938. The VIX was up 0.87 to 25.89.
   
My investment advisory service was still cautious this morning, believing that we're running in a trading range. I won't hear from them again until tomorrow morning. Today's run-up occurred on higher volume than usual, but not the kind of volume associated with earlier advances in this spring rally.


2009-7-14:  The markets were mixed today, with the Dow dropping a little, and the Nasdaq and the S&P 500 climbing a little.. The NASDAQ Composite rose 6.52 points (0.32%) to 1,799.73, the Dow shed  27.81 points (-0.33%) to close at 8,359.49, and the S&P 500 took on 4.79 points (0.53%) to end at 905.84  Oil ended the day at $59.85 a barrel, while gold was unchanged at $923. The VIX declined 1.29 to 25.02.
    An investment advisory service that normally doesn't comment on the economy or the markets warned this afternoon that the economy is a lot weaker than it's cracked up to be, and that a major drop in the stock market may lie just ahead.
    In juxtaposition to that, the Institute for Economic Research' Index of Leading Indicators, with a sterling track record for chronicling recessions, is forecasting better days just ahead, with the economy bottoming this summer.
    Quien sabe?

    Michael Ashbaugh has weighed in with Tuesday's technical analysis: Michael Ashbaugh: S&P dodges bullet for now


2009-7-13:  The markets rose today by leaps and bounds. The NASDAQ Composite rose 37.18 points (2.12%) to 1,793.21, the Dow shed  185.16 points (2.27%) to close at 8,331.68, and the S&P 500 took on 21.92 points (2.49%) to end at 901.05  Oil inched up to $59.98 a barrel, while gold dropped $10 to $923. The VIX declined 2.71 to 26.31.
    Both my investment advisory services are warning that this is a treacherous marketplace, and that today's rally is no guarantee of a renewed uptrnd. In the meantime, the Halter China Index, .HXC, remains below its 50-day moving average, which is flat, and could at any time, begin to bend down.


2009-7-10:  Another mincing day in which the markets have sidled slightly lower. The NASDAQ Composite rose 3.48 points (0.2%) to 1,756.03, the Dow shed  36.65 points (-0.45%) to close at 8,146.52, and the S&P 500 gave back 3,55 points (-0.4%) to end at 879.13  Oil dropped below $60 a barrel to $59.89 a barrel, while gold dropped $4 to 913. The VIX declined 0.74 to 29.00.
     For three trading days now, the indices have hovered around their resistance levels:
880 on the S&P 500, 1,750 on the Nasdaq, and 8,200 on the Dow. Meanwhile, the VIX dropped to 26.81 on June 11th, when the S&P hit a high of 1,556. (The VIX bottomed on July 1st at 24.8.) The S&P 500 is now off 7% from its high, but for better or for worse, the VIX isn't up terribly high from its recent lows.) 


2009-7-9:  The markets ended the day about where they began. The NASDAQ Composite rose 5.38 point (0.31%) to 1,752.55, the Dow tacked on 4.76 points (0.06%) to close at 8,183.55, and the S&P 500 shaved 1.47 points (0.35%) to end at 882.66  Oil was unchanged at $60.40 a barrel, while gold dropped $7 to 909. The VIX declined 1.44 to 29.86.
    The chart below shows how the unemployment level, after falling for five consecutive months, suddenly rose again.

    This chart shows how commodity prices, including particularly, oil, fell and then rose again as speculators bet on an imminent recovery. Note that oil prices have fallen a bit to $60 a barrel over the past four weeks.

    This chart shows how U. S. Treasury yields have risen. Appropriate stock market evaluations move inversely to the yields on Treasury bonds, competing with U. S. Treasuries for investors' dollars. Note that 10-year Treasury yields have fallen from almost 4% to about 3.3% over the past four weeks.


2009-7-8:  Although the market indices managed to struggle back up to the break-even point, the future direction of the market appears to be down. (I didn't get the reading on yesterday's action before today's opening, so I had to wing it, using my own assessment of the situation.)
    The NASDAQ Composite rose
1.0 point (0.06%) to 1,747.17, the Dow tacked on 14.81 points (0.18%) to close at 8,178.41, and the S&P 500 shaved 1.47 points (-0.17%) to end at 879.56  Oil fell  to $60.38 a barrel, while gold dropped $20 to 909. The VIX added 0.45 to 31.30. About half of the day's gains came in the last half-hour of trading with the news that the latest U. S. Treasury bond offering had been very well received, sending interest rates a little lower.
    The outlook is suitably gloomy, but the VIX doesn't mirror much concern, and that indication of complacency is, to me, a worrisome thing.
    The Halter China Index dipped below its 50-day moving average today, triggering a Cabot sell signal for some Chinese stocks.

2009-7-8 (Noon):  It looks as though the answer to that question is "yes". 
2009-7-8 (Morning):  Everybody agrees that the stock market has broken down: The market's head and shoulders may have broken, The market's head and shoulders may have broken. Given that everyone knows that the markets are heading down, will they?


2009-7-7:  It looks to me as though it's time to sell. The Dow and the Nasdaq Composite closed below their sell thresholds of 8200 on the Dow and 1750 on the Nasdaq. The S&P 500 hit its breakdown level of 880,before closing up one point at 881.
    The NASDAQ Composite fell
41.23 points (-2.31%) to 1,746.17, the Dow jettisoned 161.27 points -1.41%) to close at 8,163.60, and the S&P 500 dropped 17.69 points (-1.97%) to end at 881.03  Oil fell  to $62.12 a barrel, while gold dropped $5 to 929. The VIX added 1.85 to 30.85. I'll get a reading on today's action before tomorrow's opening, but as of tonight, it looks to me as though any technical bounce should be taken as an opportunity to go to cash.
    Michael Ashbaugh concluded this morning that the bull trend was still intact because the
S&P 500 was still above its 200-day moving average: Trendless market fuels debate, but that was before this afternoon. 
    

2009-7-7 (Morning):
  Today's market action doesn't look good. The flash point for selling is a close below S&P = 880 and 8,200 on the Dow, and 1,750 on the Nasdaq Composite... a fraction of a percent below where the indices now stand. I have just sold (at a $12 loss) the 400 shares of the Wilderhill Green Energy ETF that I bought yesterday. Today will be an interesting day in the marketplace. My investment advisory service is watching the head-and-shoulders pattern that seems to be developing. This article, Where'd the stock rally go?, helps to allay panic, and put what's happening in perspective. It argues that the free-fall is over, and that things are gradually improving. (The worse things become in the present, the easier it will be for year-over-year comparisons to eventually begin to improve.)
    From an economic standpoint, the continuing layoffs are generating increasing concern. And the first round of the Obama Administration's fiscal stimulus program won't begin to take hold until September:
And more on Bernstein-Romer. And by now, it appears that a second stimulus package is going to be necessary: U.S. must be open to second economic stimulus: Hoyer.
Paul Krugman points out today that the “paradox of thrift”... the idea that in the long run when everyone tries to save more, they end up saving less because of increased deterioration in Gross Domestic Product... really is happening as he forecast on February 2
nd: http://krugman.blogs.nytimes.com/2009/02/03/paradox-of-thrift/.
    The Halter China index, HXC, has fallen farther today than it rose yesterday, and is kissing its 50-day moving average (which is still moving up)


2009-7-6:  After falling earlier in the day, with the S&P 500 down as much as 10 points, the Dow and the S&P 500 closed up a fraction of a percent. The NASDAQ Composite fell 9.12 points (-0.51%) to 1,787.40, the Dow annexed 44.13 points (0.53%) to close at 8,324.87, and the S&P 500 added 2.3 points (0.26%) to end the day at 898.72  Oil fell  to $64.39 a barrel, while gold dropped $7 to 924. The VIX added 1.05 to 29.00.
    Officially, investors are now questioning the health and timing of the recovery. My technical advisory is very cautious, but sees what's happening as a potential buying opportunity. Meanwhile, sentiment has cooled a little, but is far from a panic state. The markets are a little oversold, but not terribly so. Meanwhile, the S&P 500 moving average is still above its flattening 50-day moving average.
    The S&P has resistance at 880.
    We'll see what tomorrow brings.


2009-7-2:  The markets fell 2% to 3% today. The NASDAQ Composite fell 49.2 points (-2.67%) to 1,796.52, the Dow lost 223.32 points (-2.33%) to close at 8,280.74, and the S&P 500 surrendered 26.91 points (-2.91%) to end the day at 896.42  Oil fell  to $66.37 a barrel, while gold dropped $10 to 931. The VIX added 1.73 to 27.95.
    Both my technical advisory services and Cabot's China and Emerging Markets Report are taking today's job news in stride, and consider this a good time to buy stocks at reduced prices.

2009-7-2 (Early Afternoon):
  Today's jobs reports have spooked the markets. Initial unemployment claims came in at 614.000 for the week ending June 27th, with the four-week average running 615,250.
On the other hand, the moving average of continuing claims dropped a pittance to 6.75 million. The non-farm payroll data is showing a drop in non-farm payroll losses,

although today's numbers represented a significant jump in the unemployment numbers for the first time this year. The concern here is that continuing escalations in unemployment could derail or at least vitiate the recovery.
    My technical advisory service warns that a head-and-shoulders pattern could be setting up in the major market indices. (At the moment, the S&P 500 index has dropped below its 50-day moving average.) On the other hand, the threat of economic Armageddon seems to have passed, and a recovery seems to be in the cards. And as I've mentioned below, the economy isn't going to contract by 40%, which is what the stock market is currently discounting.
    My advisory service took special note of the little-heralded good news that was announced yesterday, and concludes that
a recovery is still on track, in spite of all the sturm und drang in the news and the daily turbulence. It still recommends buying on dips.
    This week's Cabot China and Emerging Markets Report should arrive in my in-box this afternoon. However, the Halter China Index, at 4,641, is currently above both its 50-day (at 4,500) and its 200-day (at 3,650) moving averages, and the 200-day moving average has flattened out, prefatory to moving up, so I would imagine that their recommendation will be to


take advantage of this pullback to buy more of their recommended stocks.


2009-7-1:  An updated jobs report will come before Thursday's opening.
    The
NASDAQ Composite ended the day up
10.68 points (0.58%) to 1,845.72, the Dow gained 57.06 points (-0.97%) to close at 8,50.66, and the S&P 500 climbed 4.01 points (0.44%) to end the day at 923.33  Oil fell  to $69.436 a barrel, while gold dropped $13 to 941. The VIX added 1.0 to 26.22.
    My advisory service, which was pessimistic is quite optimistic tonight.
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?