Daily Investment Interpretations Archive

January 1, 2011, to July 1, 2011

July 1, 2010, to December 31, 2010
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January 1, 2010, to June 30, 2010
 
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

2011-7-5: (Tuesday Night): The market closed basically flat today, with the NASDAQ up a small fraction of a percent and the Dow and S&P down a small fraction of a percent: U.S. stocks retreat after best week in two years when Moody's cuts Portugal debt rating to junk grade, and S&P Warns That Greece Plan May Still Trigger Default. The NASDAQ Composite closed up 9.74 points (0.35%) at day's end to 2,825.77. The Dow fell 12.9 points (0.9%) to close at 12,569; the S&P 500 lost 1.79 points (-0.13%) to end at 1,337.88. Oil settled ato $96.78: Oil drops on supply-data jitters, equity retreat; Gold closed at $1,879: Gold rises, ending closer to $1,680 level. The VIX rose 0.19 to 16.06.
    How to use paired trades to profit in July. I didn't really follow this author's stategy. It's wonderful that his strategy returned 24% during the month of June, but what kind of return will it yield in the future? I've decided to stick with TopStock ortfolios' timing system.
    Michael Ashbaugh's weekly column notes that U.S. markets sustain the third-quarter breakout.
    Vast rare-earths discovery in the news  Troves of rare-earth ores lie on the ocean floor, and are in the spotlight.
    In this excellent explanatory article, Dr. Irwin Kellner illucidates that For the economy, it’s a tug of war. I've excerpted the following passages from his article: 
    "Because the economy has been growing at only a glacial pace, more stimulus would seem to be called for. However, since the political situation in Washington is so contentious, fiscal policy as a means of stimulating consumer spending has been rendered virtually useless. 
    "Enter the Federal Reserve. Fed chair Ben Bernanke recognized early on that monetary policy was the only game in town when it came to boosting aggregate economic activity. The Fed flooded the financial system with money, pushing interest rates down to near zero. This sent money into stocks, bonds and commodities, boosting the wealth of people who owned them, who tend to be affluent. 
    "On the other hand, this increase in liquidity has led to a sharp run-up in prices of two key staples in the average American’s market basket: food and energy. And while the Fed and many others like to look at prices excluding these items (so-called “core” prices), the fact remains that for people in the middle- and lower-income classes, higher food and energy prices have hurt their buying power immensely. 
   " So while the wealth effect has risen, the income effect has fallen. And because the affluent are relatively few in number and do not spend all they earn, the rise in their well-being is more than offset by the decline in the income effect felt by the vast majority of Americans on whom the economy relies. 
    "Thus, unless policy makers stop bickering and enact some fiscal stimulus soon, you may expect that economic growth will be weak and that unemployment will remain high well into 2012.
"
    TopStock Portfolios' David Moenning writes: The Next Question.  
    Market futures are neutral again tonight.


2011-7-4: (Monday Night): Market futures are basically neutral tonight.
    TopStock Portfolios predicts a dip sometime this week, and suggests that Research Shows It's Time To Buy the Dip.


2011-7-1: (Friday Night): The markets have gone wild again today, for a fifth "up" day in a row: Week capped by fireworks, ISM manufacturing gauge's rise is a surprise. The NASDAQ Composite was up 42.51 points (1.53%) at day's end to 2,816.03. The Dow jumped 168.43 points (1.36%) to close at 12,582.77; the S&P 500 gained 19.03 points (1.44%%) to end at 1,339.67. Oil climbed back up to $94.75 Oil snaps three-day rise, settles 0.5% lower; Gold rose a little to $1,487: Gold falls to six-week low. The VIX was unchanged at 15.87.
    TopStock Portfolios expects the markets to sell off after they reopen on Tuesday: Technical Talk: Running With The Bulls: "That being said, stocks can be expected to hiccup at least a little bit early next week, as we have gained over 5% in just 6 trading days." This may afford another chance to "buy in".
    The next resistance zone comes at the 1,345-1,350 level.
    U.S. to exhaust borrowing power Aug. 2
    There's really a lot of bad news waiting in the wings for investor attention.  


2011-6-30: (Thursday Night): The markets have now soared for a fourth day in a row: Market Wrap: Another Strong Showing, . The NASDAQ Composite was up 33.03 points (0.41%) at day's end to 2,740.49. The Dow jumped 152.92 points (1,25%) to close at 12,414.34; the S&P 500 gained 13.23 points (1.01%%) to end at 1,320.64. Oil climbed back up to $95.10; Gold rose a little to $1,511: Some gold bugs think storm has passed. The VIX fell 0.75 to 16.52.
    Technical Talk: Bulls Charging 
    Possible market bottom 
       
    How QE2 shook markets  
    "While initially benefiting Treasurys themselves, the program has done more for commodities and stocks since Fed Chairman Ben Bernanke in late August suggested the Fed could roll out a new bond-buying program.
Since then, gold futures have jumped 22% and the Thomson Reuters/Jefferies CRB index of global commodities has gained 28%. As for U.S. stocks, the Standard & Poor’s 500 Index is up 26%. The dollar index, which measures the performance of the U.S. unit against a basket of six currencies, has lost more than 10%; more money in the system is considered a way to devalue the currency."
    What the end of QE2 means for Wall Street (video)        
    "Recent gains could be a blip in the downtrend that started in April, writes Jon Markman. Here's his advice: "Apply caution in late July  The key idea is that the fiscal stimulus program failed to lift the economy enough to lower the unemployment rate, and to generate higher consumer spending.... in other words, to kick-start the economy and to generate the higher tax revenues that would pay for the money spent to stimulate the economy. "Analysts at the start of 2011 expected U.S. GDP growth to clock in at around 4% this year. And yet as manufacturing has stalled amid stubborn unemployment and a plunge in consumer confidence, economists have had to ratchet down estimates to 2% or lower. Two percent, you need to know, is stall speed for an economy as large as ours. It’s not enough to grow jobs at any kind of reasonable pace to make up for the ones lost since the last recession. So that $750 billion borrowed and allocated for stimulus by Congress in the president’s first year, and the $600 billion borrowed and allocated for bond buying by the Federal Reserve, have literally bought us nothing. There has been no payoff. None. Zilch. Nada. That’s why we’ve now got to cut into the kids’ milk money to pay the bills. 
    "Lakshman Achuthan, head of the Economic Cycle Research Institute — the one forecasting organization that I trust — says the hidden reason for all this is that the global industrial machine has entered a profound and pervasive cyclical slowdown that cannot, at this point, be blunted. Concurrently, he says, employment growth has peaked for this cycle, and will never improve beyond the pace seen in February to April this year. “That was as good as it’s going to get,” he told me in an interview this week. This is a huge problem because the only way that debts can be paid off — in Greece or the United States — is if borrowed money is used to create valuable assets that spin off cash. Without growth that creates jobs (and in turn generate taxes that can pay off the debt), you have one big smokin’ hole in the middle of your country.

   
Market futures are slightly lower tonight.  


2011-6-29: (Wednesday Night): The markets soared for a third day in a row: S&P advances above 1,300, . The NASDAQ Composite was up 11.18 points (0.41%) at day's end to 2,740.49. The Dow jumped 72.73 points (0.6%) to close at 12,261.42; the S&P 500 gained 10.74 points (0.83%) to end at 1,307.41. Oil climbed back up to $95.10; Gold rose a little to $1,511: Some gold bugs think storm has passed. The VIX fell 1.9 to 17.27.
    Brett Arends writes about the Story behind the market's ‘boom’... namely, that during the booming first quarter of 2011, corporations were using their excess cash to buy up corporate stock, but corporate insiders weren't buying. ""
“'While insiders are willing to use corporate cash to try to support the value of their stock-based compensation, they don’t seem to think their stocks are attractively priced,' Biderman said. Where did the companies find the money to buy back their stock? In some cases the money came from profits. That’s a good thing. But in other cases they just borrowed the funds. According to the latest data from the Federal Reserve, corporate debt surged again last quarter — to the highest levels on record... When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives aren’t even willing to invest their own money, it doesn’t exactly make me enthusiastic about the stock either."
    Stocks are up slightly tonight.


2011-6-28: (Tuesday Night): The markets soared again today: Rally rolls on in second day, Stocks soar on housing data, and Market Wrap: Stocks Gain; Greece to Vote. The NASDAQ Composite was up 41.03 points (1.53%) at the end of the day to 2,729.31. The Dow jumped 149.13 points (1.21%) to close at 12,188.69; the S&P 500 gained 16.57 points (1.29%) to end at 1,296.67. Oil climbed back up to $93.06: Crude rallies 2.5%; Gold rose a little to $1,502: Contrarians still bullish on gold. The VIX fell 1.39 to 19.17.
    Michael Ashbaugh tells us that the markets could go up or down from here: Staking out the technical cross currents.
    Fido traders call S&P 1,400. This article has Fidelity investors calling for 1400 on the S&P 500 by year's end. (It's worth noting that the retired chief forecaster for Standard & Poor's has predicted an S&P at 1,450 by October 1.)
    Two good articles at the TopStock Portfolios website are: Technical Talk: Rally Ahead of the Vote, and Caveat Emptor - Who Can You Trust?.
    Market futures are down slightly tonight.


2011-6-27 (Monday Night): The markets rose today about as much as they fell on Friday: Dow retakes 12,000 level, Street optimistic on Greece. The NASDAQ Composite was up 33.86 points (1.33%) at the end of the day to 2,688.28. The Dow jumped 108.98 points (0.91%) to close at 12,043.56; the S&P 500 gained 11.65 points (0.92%) to end at 1,280.10. Oil slipped to $90.79: Oil slides to 4-month low; Gold declined to $1,498: Gold falls to 5-week low below $1,500. The VIX fell 0.54 to 20.56.
    Bad press is killing the recovery! 
    Peter Brimelow writes: Stocks suffering, but crash fears recede  
    Mark Hulbert notes that S&P 500 passes third moving average test, but is it a fake out? Dennis Slothower suggests that the refusal of the S&P 500 to drop below its 200-day moving average three times in a row is a classical technical bullish signal, and that it may encourage traders to jump aboard, only to take them down in July. On the other hand, he notes that the S&P 500 must close below its 200-day moving average in order to signal the start of a bear market.
    Market futures are up about 0.1% tonight.


2011-6-24 (Friday Night): The markets swooned again today and this time, they didn't recover: Durable-goods rebound, GDP revised upward, Stocks: No summer love. The NASDAQ Composite dropped 33.86 points (-1.26%) (about as much as it lost yesterday) to 2,652.89. The Dow tumbled 115.42 points (-0.96%) to close at 11,934.58; the S&P 500 lost 15.05 points (-1.17%) to end at 1,268.45. Oil slipped to $91.28: Regulators looking into oil reserve-release leak; Gold plunged again to $1,503: Gold's June bugs its bulls. The VIX rose 1.81 to 21.10.
    U.S. too big to fail, right? This title is self-explanatory.
    New recession begins next year: Shilling Notice the distinction between "Shiller" and "Shilling". Shilling is a permabear. 
    Shiller: Recession Is Substantial For U.S  
    Mark Hulbert notes that Betting on last six months’ momentum isn't a winning strategy  The markets are still up for the first half of the year, but there's no meaningful correlation between their first-half performance and their second-half performance.
    The good news today was: Durable-goods rebound, GDP revised upward


2011-6-23 (Thursday Night): The markets swooned today and then partially recovered: Stocks rebound on reports of new Greek austerity plan, 200-day moving average holds again. The NASDAQ Composite recovered 17.256 points (0.66%) (about as much as it lost yesterday) to 2,686.75. The Dow fell 59.67 points (-0.49%) to close at 12,050.80; the S&P 500 lost 3.64 points (-0.28%) to end at 1,283.50. Oil dove to $91.8: Oil sinks after IEA moves to release reserves; Gold plunged to $1,522. The VIX rose 0.77 to 19.29.
    Five moves one hawk is making: Well-respected investment advisor Robert Arnett suggests five moves that could be advisable if Washington decides to print its way out of debt. The first is to dump traditional asset allocation. The second is to buy inflation adjusted Treasury bonds ("TIPS"). The third is to stock up on commodities. The fourth is to embrace emerging markets. And the fifth is to reach for high-yield bonds.

    10 fees that can wreck your retirement savings  
    Individual investor sentiment improves  
    5 hard questions many bears just can’t answer  
    Peter Brimelow tells us that the Top letter is free, but frightening . The author hasn't posted for sic months, but his stock selections have done well. Last December, he recommended investing in gold and oil, and both have done well so far this year. He also expects a decades-long bear market which he forecast starting early this year. (He now says, "As usual, I was early.")
    I, by contrast, expect the current secular bear market to continue through this presidential cycle but to shift into a secular bull market in the latter half of the next presidential cycle.
    It's much too early to read much into market futures, but stock market futures are up ⅓ %  tonight.  


2011-6-22 (Wednesday Night): After four consecutive advances, the market averages fell today: Bernanke bums out bulls, Stocks end down after Fed comments on economy. The NASDAQ Composite retrenched 18.07 points (-0.67%) to 2,669.19. The Dow retreated 80.34 points (-0.66%) to close at 12,109.67; the S&P 500 slid 8.38 points (-0.65%) to end at 1,287.14. Oil inched up again to $94.16 (FTC probes oil, gasoline); Gold rose to $1,557. The VIX fell 0.34 to 18.52.
    Fed Chairman Bernanke is the heavy in today's market retreat: Bernanke offers sobering economic outlook, Street's worried but not Fed,, Bernanke: 'Years' before a return to full employment, and Asia slumps on Fed outlook.
    Mark Hulbert
suggests that the stock market is overvalued by historical standards: Stock-market history telling us two things
    Marketwatch's Matthew Lynn says, Forget economics, politics rules markets.
    Irwin Kellner writes: Jobs reach fork in the road.
    And Record corporate cash isn't necessarily bullish.
    Market futures are down about ¼ % tonight.


2011-6-21 (Tuesday Night): The markets soared today, marking the fourth day of gains in a row: Street awaits Greece vote. The NASDAQ Composite catapulted 57.6 points (2.19%) to 2,687.26. The Dow lifted 109.63 points (0.91%) to close at 12,190.01; the S&P 500 added 17.16 points (1.34%) to end at 1,278.36. Oil inched up again to $93.70 (FTC probes oil, gasoline); Gold rose to $1,548. The VIX fell 1.13 to 18.86.
    In Michael Ashbaugh's weekly column, he observes that S&P 500 rises to first major technical test. What he says is pure Ashbaugh.
    Mark Hulbert assesses recent sentiment changes, Have the bulls retreated enough? and concludes market sentiments are consistent with a bear market... not that a bear market has to ensue, but that conditions are more favorable than not for such an outcome.
    Faith and credit:
Colquhoun also said the U.S. will move to 'restricted default' if it fails to make its Aug. 15 coupon payments. While a U.S. default is likely to be cleared promptly, 'it’s highly unlikely after such a default that the (U.S.) rating would move back to triple-A.'”
    Stock futures are down slightly tonight.


2011-6-20 (Monday Night): The markets all rose today: Market Wrap: Three In a Row. The NASDAQ Composite gained 13.18 points (0.5%) to 2,629.65. The Dow lofted 76.02 points (0.63%) to close at 12,080.38; the S&P 500 added 6.86 points (0.54%) to end at 1,278.36. Oil inched up to $93.32 (FTC probes oil, gasoline); Gold rose to $1,541. The VIX fell 1.86 to 19.99.
   Jeffrey Hirsch of Stock Trader's Almanac says that the U. S. stock market is in its historically worst six-month period, and you shouldn't be taking chances: It's time for these 5 moves.
   Mark Hulbert quotes Dennis Slothower, who predicts that the S&P will stall below its 50-day moving avaerage, currently at 1,322, and that it will then turn down in a big way. Is that the death cross on the horizon?
   No plan B if Greece fails to pass austerity measures "To be sure, the entire crisis at the moment is over whether to have Greece default now or later, and formally or informally."  
   Bernanke's challenge will be to soothe markets: "It's not what the Fed does at the end of its meeting Wednesday but how the chairman says it."
   TopStock Portfolios' David Moenning writes: Now It Gets Interesting. "So, without any real news to drive the action, I'm of the mind that the market may show its true colors between now and Wednesday afternoon. For me, the question at hand is if the nearly two-month old correction and a -7% decline is enough to discount the negatives and the uncertainty. If so, then I'd expect to see the indices waffle sideways for a while awaiting a positive catalyst from either Mr. Bernanke or some news out of Europe. However, if the big funds have moved into a de-risking mode, we might see the indices work lower and take out the March lows."
    The major drop in the Volatility Index (VIX) suggests to me that the markets performed well today, supporting a short-term "run for the roses".
    Stock futures are up a bit tonight.  


2011-6-19 (Sunday Night): Market futures are neutral-to-slightly-lower tonight. Here are a few articles that might be helpful in interpreting this coming week:
    Investors search for signs U.S. will avert a double dip 
    Rough patch here to stay?  
    S&P 500 dodges a bullet…barely  
    U.S. stocks struggling to hold gains  
    Long recovery delay? 
    European Finance Ministers Postpone Decision on Greek Loans     


2011-6-17 (Friday Night): The markets ended mixed again, with the NASDAQ down, and the Dow and the S&P 500 up a bit: U.S. stocks post first weekly gain since April, Market Wrap: Good News But Weak Action. The NASDAQ Composite subtracted 7.22 points (-0.22%) to 2,616.70. The Dow advanced 42.84 points (0.36%) to close at 12,004.36; the S&P 500 gained 3.86 points (0.30%) to end at 1,271.50. Oil plummeted to $92.91; Gold eased down to $1,528. The VIX rose another 0.88 to 21.85.
    In the good news department, there's IMF looks past soft patch, and Mark Hulbert's observation that corporations and corporate insiders have recently started buying up their corporate shares instead of selling them: Repurchases running at near record levels. Mark argues that they wouldn't be re-investing in themselves if they thought that the economy were headed toward recession.
    On the other hand, Howard Gold says: Bells ring out the end of this bull market, and Peter Brimelow cites Harry Schultz foreseeing: Stock collapse and $12,000 gold? The Aden sisters are also warning of risks ahead, and are recommending that their clients be 30% in cash, 40% in  precious metals, and 30% in stocks.
    TopStock Portfolios' David Moenning sees the markets basing in preparation for a short-to-intermediate move to the upside: Is The Tide Turning?.  
    Moody's has just placed Italy on review for a downgrade.


2011-6-16 (Thursday Night): The markets ended mixed, with the NASDAQ down, and the Dow and the S&P 500 up a bit: Dow, S&P 500 snap back. The NASDAQ Composite subtracted 7.76 points (-0.29%) to 2,623.70. The Dow advanced 64.25 points (0.54%) to close at 11,961.52; the S&P 500 gained 2.22 points (0.18%) to end at 1,267.64. Oil eased up to $99.24; Gold eased down to $1,531. The VIX rose another 1.41 to 22.73.
    Here are 11 reasons stocks will storm back soon. Peter Brimelow counters with Stock collapse and $12,000 gold? ... the usual "Tower of Babble".
    TopStock Portfolios' contributions to today's analyses are: 
Market Wrap: More Good News Than Bad,
 
Economic Research Research InstituteI Founder Calling For Prolonged Slowdown in U.S
:
    "On the U.S. economic front, there’s good news and bad news: The good news is the U.S. is “not yet” entering a double-dip recession. The bad news- we are headed toward a sharp and prolonged economic downturn. …at least according to a Wall Street Journal interview with Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, a well-respected economic forecasting firm that has a strong track record for identify turning points in the market."
and Will They Muck It Up?  
    "I've been working under the assumption that the powers-that-be in Europe (the EU, ECB, the IMF, and the heads of the various PIGI states) would find a way to eventually "handle" the situation in Greece. Note that I did not say "fix" the situation in Greece, or Portugal, or Spain, or Ireland. No, I have merely been expecting the guys and gals in charge to find a way to avoid a "credit event" that, if not dealt with correctly, could threaten the global banking system all over again. Given the amount of time that the leaders of the world have had to work on this issue, I've assumed that they would figure out some way to make everyone (meaning the Germans) happy enough to kick this ugly can down the road - at least far enough to give the world some breathing room. However, with riots in the streets of Greece and the politicians now getting involved, I am becoming more than a little concerned that the politicos might muck this thing up. And in short, THIS is what Wednesday's dance to the downside in the stock market was all about.
.....
"Looking ahead, once the powers-that-be DO actually ride in on their white horses and save the day, it is a safe bet that stocks will rally ferociously. And THEN traders can return their attention to the state of the U.S. economy. And on that note, if the data doesn't start improving, we might be in for a very long summer.
"
    Market futures are up slightly tonight.


2011-6-15 (Wednesday Night): The markets plunged: S&P off 7% from April high, 'smelling blood', Greece, data sink stocks, Why The Dive: (It's the Politicos in Europe). The NASDAQ Composite tumbled 47.27 points (-1.76%) to 2,631.46. The Dow retreated 178.84 points (-1.48%) to close at 12,897.27, while the S&P 500 parted with 22.45 points (-1.74%) to end at 1,265.42. Oil eased up to $99.24; Gold eased down to $1,531. The VIX jumped 3.02 to 21.32.
    The reasons aren't hard to find: Market Wrap: Contagion Fears Drive Stocks to New Correction Lows, and Back To Data Dependent. As if this weren't enough the Empire Manufacturing index was negative and far below expectations: Empire Manufacturing Index Dives in June. Then, too, NAHB Homebuilder Confidence Index Falls in June. The only good news, from a contrarian standpoint, is: Bullish Sentiment Takes a Dive After Six Weeks Decline.
    Another article, Beware Of Greeks Bearing Debts, spelling out the sequence of events that could follow Greece' default on its debts, gives chilling reasons for caution and temporizing.
    Stocks are slightly up tonight.


2011-6-14 (Tuesday Night): Today, the markets rebounded: Blue chips reclaim 12,000, Market Wrap- Bulls Get Their Bounce. The NASDAQ Composite jumped 39.03 points 1.48%) to 2,678.72. The Dow advanced 123.14 points (1.03%) to close at 12,076.11, while the S&P 50 hopped 16.04 points (1.26%) to end at 1,287.87. Oil eased up to $99.24; Gold eased down to $1,531. The VIX fell 1.35 to 18.26.
    Michael Ashbaugh's column today is entitled: S&P and Dow return to scene of the breakdown.
    Mark Hulbert has an interesting column tonight: Insiders turn back from the brink. His point is that corporate insiders, who were leading the stock market retreat two weeks ago, began buying back in late last week, and are continuing to buy stocks this week. 
    David Moenning has maintained the same stance this morning: What Comes Next?. His point is that the indices now face resistance levels that will determine whether they are going up or down from here. (Two resistance lvels are 1300 and 1320 on the S&P 500.) 
    On the other hand, Nouriel Roubini
is quoted as saying: Roubini- More Than a Soft Patch (And QE3 is on the Way).
    For whatever it might mean, market futures are down a couple of tenths of a percent tonight.


2011-6-13 (Monday Night): The markets treaded water today. The NASDAQ Composite slipped 4.04 points (-0.15%) to 2,639.69. The Dow eased  up 1.06 points (0.01%) to close at 11,952.97, while the S&P 500 added 0.85 points (-1.4%) to end at 1,271.83. Oil climbed to $99.17; Gold slipped to $1,531. The VIX rose 0.85 to 19.61.


2011-6-10 (Friday Night): The markets crumpled again today: Dow sinks below 12,000, Goldman served first again: Maybe not. The NASDAQ Composite tumbled 41.14 points (-1.53%) to 2,643.73. The Dow sank 143.45 points (-1.42%) to close at 11,951.91, while the S&P 500 sagged 18.02 points (-1.4%) to end at 1,270.98. Oil fell to $98.92; Gold slipped to $1,533. The VIX rose 1.09 to 18.86.
    Yesterday, I wrote,
    "
Today's action probably reduced the rebound pressure on the markets, although I would expect them to continue to rise to their resistance levels (1300 and 1320 on the S&P 500), and to make their bounces sufficiently compelling that many professional investors buy back in. Then the markets can suddenly reverse, and take away their money."
    Instead, the markets plunged.
    So much for my future as a stock market psychic.
    Here's what TopStock Portfolios featured today: Buzzkill - Part III (Tepper's View), Did Anything Change?, and The Way I See It (A Look At the Big Picture).     
    The first of these articles interviews David Tepper, who, when QE2 was first approved, announced that it was "game on" in the stock markets. Mr. Tepper is now predicting that there wont be a QE3... i. e., it's "game off" time now.
    The second article, written by David Moenning, asks whether Thursday's rise was just a technical bounce, based upon no meaningful changes in the economic outlook, or whether it had further to run. He concluded... correctly we know now... that it probably was just a "dead-cat bounce".
    The third article, by "Curt B.", concludes, "To sum up - My intuitive sense is uncomfortable but I also recognize that there is not yet objective market based evidence indicating that the bull market cannot continue. So I circle back to what I have stated before. I will keep positions small, attempt to quickly cut losses, look to take profits without quickly (and avoid getting greedy), and stay flexible."
    Mark Hulbert on Are stocks sending a sell signal?. He explains that he tried a market timing system in which he sold whenever one of the market indices (the S&P 500?) fell below its 200-day moving average and bought whenever it rose above its 200-day average. The system worked well in the 80's, and broke down in the 90's and the 00's.


2011-6-9 (Thursday Night): After six down days, the markets finally  bounced: Lucky 7 brings out bulls. The NASDAQ Composite rose 9.49 points (0.35%) to 2,684.87. The Dow acquired 75.42 points (0.63%) to close at 12,124.36, while the S&P 500 gained 9.44 points (0.74%) to end at 1,289.00. Oil closed up at $101.88; Gold slipped to $1,545. The VIX dropped 1.02 to 17.7.
    Oil prices are moving up now that OPEC has eschewed production hikes.
   
Today's action probably reduced the rebound pressure on the markets, although I would expect them to continue to rise to their resistance levels (1300 and 1320 on the S&P 500), and to make their bounces sufficiently compelling that many professional investors buy back in. Then the markets can suddenly reverse, and take away their money. 
    TopStock Portfolios' Market Wrap: A Good News, Bad News Situation. TopStock Portfolios observes that today's bounce was nothing special, and that good news was hard to find.
    As Fidelity words it: Wall Street bounce fails to impress the skeptics.
    ECB’s Trichet signals hike, vows no default   Euro drops after ECB press conference   Euro end game draws nearer  
    Many will have to work into their 80s   
    Selling pressure is on — defense takes hold  
    Stock market futures are neutral again tonight.


2011-6-8 (Wednesday Night): The markets closed lower again today: Street's down for 6th day. The NASDAQ Composite fell 2618 points (-0.97%) to 2,675.38. The Dow drifted downward 21.87 points (-0.18%) to close at 12,048.94, while the S&P 500 slid 5.38 points (-0.42%) to end at 1,279.56. Oil closed down at $101.07; Gold slipped to $1,538. The VIX dropped 0.72 to 18.79.
    The economic news continues to disappoint: Fed's Beige Book Shows Some Signs of Deceleration,
EU/IMF/ECB Says Greece Deficit Worse Than Expected, and OPEC Decides Not To Increase Crude Output. The only good news is: Bullish Sentiment Falls In Response To Correction, if you can call that good news. 
    Master investor Mark Moebius is eagerly anticipating a market collapse: The Brighter Side to a Market Meltdown. But this article claims that the Economy is not collapsing. TopStock Portfolios' David Manning also subscribes to that interpretation, although his actions are informed by his indicators rather than his opinions.
    At the moment, I'm almost entirely in cahs.
    Market futures are up tonight. (Stock indices continue to be very oversold.)


2011-6-7 (Tuesday Night): The markets rallied strongly today and then lost it all near the close, ending down slightly for the day: Stocks shed day's gains, Market Wrap: Late Fade Leads to Fifth Consecutive Loss. The NASDAQ Composite fell 1 points (-0.04%) to 2,701.56. The Dow drifted downward 19.15 points (-0.16%) to close at 12,070.81, while the S&P 500 slipped 1.23 points (-0.1%) to end at 1,284.94. Oil closed down at $99.09.; Gold ended at $1,544. The VIX dropped 0.42 to 18.17.
    Fed Chairmen Bernanke: No double dip. Chairman Bernanke sees jobs and growth picking up in the second half of this year: Bernanke: Economic Growth Subpar; Low Rates Still Needed. One question that comes to mind is that of whether the markets didn't like what Dr. Bernanke said this afternoon: Stocks tank after speech, and Don't bet on 'QE3,' Dave Callaway advises.
   
Later: That's what happened: Bernanke kills Wall Street's buzz.
    I think Fed Chairman Bernanke might be trying to pour oil on troubled waters.
TopStock Portfolios' David Moenning published this article this morning: Are We Scaring Ourselves?.  Could there be other behind-the-scenes steps the Fed can take to boost economic growth? With the federal budget still up for grabs, now might not be a politically savvy time to announce further government stimulus rograms. If things get worse later in the summer, Dr. Bernanke can always revisit the topic of additional stimulus.
    Consumer Credit Expands for Second Straight Month in April. There hasn't been a lot of coverage in the news about the softening of the economy. I suspect most people aren't aware yet that the unemployment rate has inched up again to 9.1% from 9%, or that the economy is slowing. However, consumer sentiment is falling.
    Saudi Arabia Upping Production Ahead of OPEC Meeting... I wonder if this is because of they perceive a gathering threat of a worldwide downturn.
   Stock market futures are flat again tonight (but the indices are very oversold).


2011-6-6 (Monday Night): The markets dropped sharply again today: Stocks slip on investor jitters, S&P's back below 1,300. The NASDAQ Composite fell 30.22 points (-1.11%) to 2,702.56. The Dow dove 61.3 points (-0.5%) to close at 12,089.96, while the S&P 500 was thrown for a loss of 13.99 points (-1.08%) to end at 1,286.13. Oil closed down at $98.77.; Gold gained to $1,545. The VIX rose 0.54 to 18.59.
    TopStock Portfolios has this to say about today's market action: Technical Talk: It's About Time For a Bounce, and Market Wrap: Another Ugly Day on Macro Worries: "The recent downtrend remained solidly intact on what amounted to a quiet news day with no significant economic data and little company specific news.... 
    "From a big-picture standpoint, the market appears to be struggling with the outlook for the future. With very weak job growth, a double-dip in the housing market, and nearly all governmental stimulus programs now ending, the question becomes one of what will be the driver for economic growth over the next 12 months?
    "From a chart standpoint, the technicals are quickly becoming ugly. While stocks are indeed oversold and due for a bounce, the bulls would now need a meaningful move back above 1320 in order to turn things around. Thus, traders will be watching to see if the coming bounce has any support
."
    Apparently, today's mini-bounce didn't replace a bigger bounce yet to come. 
    Peter Brimelow writes: Five down weeks stir crash whispers
    Focus on Asia: It’s ‘where the money is’  
    Soros is selling his gold, so should you? 
    Stock market futures are flat again tonight.


2011-6-5 (Sunday Night): A hurricane warning has been posted for the stock market this week: Technical Talk: It's a Downtrend Until Proven Otherwise. The financial outlook is very gloomy. The market could bounce upward from here or it could go further down, but financial portents have reached an extreme. This is a good time to be in cash, or maybe even to short the market.
    Market futures are neutral tonight.


2011-6-3 (Friday Night): The markets dropped sharply today: Stocks drop 2.3% in week. The NASDAQ Composite fell 40.93 points (-1.46%) to 2,732.78. The Dow dove 97.29 points (-0.79%) to close at 12,151.26, while the S&P 500 was thrown for a loss of 12.78 points (-0.97%) to end at 1,300.16. Oil closed up a tad at $100.64.; Gold fell back to $1,534. The VIX fell 0.14 to 17.95 (go figure!)
    As I said yesterday, every indication points toward a flagging economy. How to cope with global slowdown "David Rosenberg offers five tips to play a disinflating, dramatically weaker global economy, says Jonathan Burton."
    Jaffe: Stock touts prey on inflation fears.
    It's been a bad week for the investors, but also for the administration, which had better respoond forthwith if it hopes for re-election.


2011-6-2 (Thursday Night): The markets closed flat today: Technical Talk: Bulls Clinging to Line In Sand, Market Wrap: Waiting On The Jobs Report. The NASDAQ Composite gained 4.12 points (0.15%) to 2,773.31. The Dow dipped 41.59 points (-0.34%) to close at 12,248.55, while the S&P 500 posted a loss of 1.61 points (-0.12%) to end at 1,312.94. Oil closed up a tad at $100.64.; Gold fell back to $1,534. The VIX leaped 0.21 to 18.09.   
    Every indication points toward a flagging economy. '...And Then They Matter A Lot'. Of course, not everyone thinks that the sun is setting in the west: Dow 20,000, here we come. The author lists 10 cogent reasons why the markets are primed to rise.
    Market futures are slightly lower tonight.


2011-6-1 (Wednesday Night): The markets crashed today, losing more than they gained yesterday on fears of slowing economy: Growth fears spur wipeout, U.S. stocks slammed by downbeat data. The NASDAQ Composite lost 66.11 points (-2.33%) to close at 2,769.19. The Dow shed 279.65 points (-2.22%) to close at 12,290.14, while the S&P 500 posted a loss of 30.65 points (-2.28%) to close at 1,314.55. Oil closed down at $99.70; Gold climbed to $1,541. The VIX leaped 2.85 to 18.30.   
    Whether to jump ship as QE2's end approaches  
    Moody's cuts Greece rating; outlook negative.
    Why housing is in a depression
    Mark Hulbert has two articles tonight: Think again before going tech, and Rebuild the wall.  
    Market futures are up a little tonight.


2011-5-31 (Tuesday Night): The markets rose again today, rupturing resistance levels. The NASDAQ Composite gained 38.44 points (1/37%%) to close at 2,835.30. The Dow jumped 128.21 points (1.03%) to close at 12,569.79, while the S&P 500 posted a gain of 14.1 points (1.06%) to close at 1,345.20. Oil closed essentially unchanged at $100.75; Gold climbed to $1,538. The VIX slipped 0.53 to 15.45.   
    David Weidner's column is entitled: Why no jail time for Wall Street CEOs.  
    Irwin Kellner observes that: ‘Soft patch’ catches economists off-guard.  
    Mark Hulbert provides an Update on inflation-deflation battle.  
    Peter Brimelow asks: Gold signaling hyperinflation-
    TopStock Portfolios has a defensive posturte regarding what's currently going on, with the expectation of further downside and a possible change in trend from bull to bear: The Newest "Trade" In Town?, Market Wrap: Risk Back On as Default Fears Recede.
    Stock futures are up tonight.


2011-5-27 (Friday Night): Well, the markets rose again today in defiance of Laszlo Birinyi's warning (but NYSE composite volume logs lowest level this year). You just can't depend on those markets to do what you tell them to do. The NASDAQ Composite gained 38.82 points (0.31%) to close at 2,796.86. The Dow rose 38.82 points (0.31%) to close at 12,441.58, while the S&P 500 posted a gain of 5.41 points (0.41%) to close at 1,331.18. Oil closed essentially unchanged at $100.75; Gold climbed to $1,538. The VIX slipped 0.11 to 15.98.   
    Topstock Portfolios Daily State of the Markets discussion is entitled: Who Do You Believe? Are They Watching In Washington? is a companion article. 
    Investment consultant Liz Miller doesn't "think that we're hitting a true soft patch": Miller: Market will take choppy path higher.
    Tuesday will be the last day of May, and may mark the end of the current modest rally.  

2011-5-27 (Friday Afternoon): What I said below was wrong: today isn't the last trading day of the month. Tuesday, May 31st, will be the last trading day of the month. However, Laszlo Birinyi warns that stocks tend to fall on the last trading day before the Memorial Day holiday: Birinyi: Watch for the pre-Memorial Day fade.


2011-5-26 (Thursday Night): The markets rose again on the third day:.Stocks shake off losses The NASDAQ Composite rose 21.54 points (0.78%) to close at 2,782.92. The Dow gained only 8.1 points (0.07%) to close at 12,402.76, while the S&P 500 posted a gain of 5.22 points (0.4%) to close at 1,325.69. Oil retreated to $100.64; Gold ended at $1,526. The VIX fell another 0.98 to 16.09.  
    The indices have long hills to climb before they hit resistance levels at their previous highs. The general consensus is that they won't make it before they fall down again ("Sell in May and go away.")
    Goldman Sachs revised their year-end forecast for a year-end S&P 500 reading of 1500 downward to 1450 today: Additional Input On Goldman's Downgrade of S&P Target
    Mark Hulbert writes: Bet on short-term strength.
    Since Monday is a holiday, tomorrow will be the last trading day of the month.
    Beware of experts bearing predictions  
    Veteran Allmon sees no crash ... just yet  
    Market futures are up tonight. 


2011-5-25 (Wednesday Night): The markets rose somewhat today. (They were oversold short-term.) The NASDAQ Composite rose 15.22 points (1.58%)0.55%) to close at 2,761.38. The Dow gained 38.45 points (0.31%) to close at 12,394.66, while the S&P 500 added 4.19 points (0.32%) to close at 1,320.47. Oil popped to $101.82; Gold ended up at $1,528. The VIX fell another 0.75 to 17.07.   
    At least one TopStock Portfolio expert expects to see further weakness in the stock market indices: Market Wrap: Stocks Snap Losing Streak on Window Dressing.
    Michael Ashbaugh adds: S&P 500 survives test of major support.
    In What the insiders are telling us about stocks, Mark Hulbert notes that corporate insiders consider the current doldrums as part of a correction in an ongoing bull market. I would add that the markets haven't pulled back much in the face of quite a bit of bad news.
    Market futures are flat tonight.


2011-5-24 (Tuesday Night): The markets are down again tonight, though not by terribly much: U.S. stocks end near one-month lows The NASDAQ Composite retreated another 12.74 points (1.58%)-0.46%) to close at 2,746.16. The Dow dropped 25.05 points (-1.05%0.2%) to close at 12,356.21, while the S&P 500 slipped 15.9 points (-1.19%0.08%) to close at 1,316.29. Oil retreated to $98.82; Gold ended unchanged at $1,524. The VIX fell 0.45(!) to 17.82.
    Stocks are down again today because the dollar is slightly higher again today.  Michael Ashbaugh writes that: Cracks widen in S&P’s technical backdrop. He explains that 1,313 on the S&P is a major milestone. Right now, the S&P 500 has closed 3 points above this watershed.  
    TopStock Portfolios writes Something To Look Forward To? and Technical Talk: The Battle For 1320 Continues to Rage.
    Stocks are down significantly again tonight.  


2011-5-23 (Monday Night): Whew! The stock market dove today on S&P downgrades of .Italian and Spanish debt, and a falling Euro: Italy, Spain trigger fears, Stocks skid on renewed worries about Europe, and U.S. stock indexes hit by global concerns. The NASDAQ Composite plummeted 44.42 points (1.58%) to close at 2,758.90. The Dow plunged 130.78 points (-1.05%) to close at 12,381.26, while the S&P 500 lost another 15.9 points (-1.19%) to close at 1,317.37. Oil retreated to $97.12; Gold jumped to $1,501. The VIX rose 0.84 to 18.27.
   
The markets were down today on a rising dollar brought on by global worries. TopStock Portfolios warns of a possible downshift in the stock markets, although they're best guess is that it will pop once more before retreating: Are The Winds Shifting?
Other TopStock articles include: Market Wrap: Stocks Struggle with Signs of Weak Global Growth, The Latest on the European Debt Mess, Chicago Fed National Activity Index Falls in April, Eurozone Elections Creating Concerns About Bailout Programs, Eurozone PMI's Below Expectations in May, S&P Reduces Italy's Debt Rating Outlook, PIGI'S Update: Norway Stopping Aid to Greece, Bundesbank Says German Economic Growth Will Slow, and Equity Funds See Outflows For Second Consecutive Week.
    Gas prices still choke consumer spending   
    Reagan insider: GOP destroyed U.S. economy, Part 2   
    Willard Cody advises his subscribers that they should be the bearish grain.  
    Market futures are neutral tonight.  


2011-5-22 (Sunday Night): I haven't mentioned TopStock Portfolios Daily Decision Stock Trade service for a few weeks because it hasn't been doing too well lately. I don't know why, and neither does Richard Meiers, who operates the service. He says he's going to spend the weekend trying to figure out what to do about this.
    It looks to me as though the markets have been particularly perverse over the past few weeks, perhaps because of hedge funds jumping in and out of the markets and manipulating them.
    Market futures are down sharply tonight.


2011-5-20 (Friday Night):  The market indices fell significantly today in response to European woes leading to a falling Euro and a rising dollar: Volatile ride in down week. The NASDAQ Composite dropped 19.99 points (0.71%) to close at 2,803.32. The Dow fell 93.28 points (-0.74%) to close at 12,512.04, while the S&P 500 lost 10.33 points (-0.77%) to close at 1,333.27. Oil rose a little to $98.99; Gold closed at $1,495. The VIX ended the day at 17.43. 
    Mark Hulbert explain that Bulls may head for the exits (audio). Other kindred articles include A shift toward defensive sectors, Three stock sectors to protect your portfolio, and Messages from the Russell 2000. Mark Hulbert adds that "Surveys of investors' moods throw off different indications, but actual exposure to the market appears even more bullish than these measures suggest." in War of sentiment indicators (video). Another article observes that "Stocks are caught in a tug-of-war between the bears, focused on weaker economic data, and investors more bullish on growth." in "Whipsawed? Get used to it (video)". 
    I'm struck by the bearishness of the general tone on Marketwatch right now... a very bullish sign. Bull markets don't end in a fit of gloom and doom.


2011-5-19 (Thursday Night):  The market indices rose again today, albeit modestly: Stock bulls hang in there. The NASDAQ Composite added 8.31 points (0.3%) to close at 2,823.31. As mentioned above, the Dow rose 45.14 points (0.36%) to close at 12,605.32, while the S&P 500 tacked on 2.92 points (0.22%) to close at 1,343.60. Oil rose a little to $98.99; Gold closed at $1,495. The VIX fell 0.71 to 15.52. 
    Peter Brimelow remarks: Top-performing bull edges to exit, "but based on a pretty subtle reading of his system". Also, Leading indicators reverse: "The pace of economic growth may be 'choppy' in the summer and fall, the Conference Board says."
    TopStock Portfolios' David Moenning analyzed the day like this: Market Wrap- Wall Street Cheers IPO (And the Dollar's Decline).
    Stock market futures are slightly down tonight. 


2011-5-18 (Wednesday Night):  The market indices all hopped up today (the technical bounce mentioned yesterday?). The NASDAQ Composite rose 31.79 points (1.14%%) to close at 2,815.00. As mentioned above, the Dow lifted 80.6 points (0.65%) to close at 12,560.18, while the S&P 500 regained 11.7 points (0.88%) bringing it to a resistance level at 1,340.68. Oil rose a little to $97.78; Gold closed at $1,491. The VIX fell 1.32 to 16.23. 
    Stock market futures are up tonight. Otherwise, I'm aware of very little that's new today. 


2011-5-17 (Tuesday Night):  The NASDAQ and the S&P 500 indices ended the day essentially where they started it, but the Dow fell by 68.79 points. The NASDAQ Composite rose 0.90 points (0.03%) to close at 2,783.21. As mentioned above, the Dow lost 68.79 points (-0.55%) to close at 12,479.58, while the S&P 500 fell back 0.49 points (-0.04%) to close at: 1,328.98. Oil rose a little to $97.78; Gold closed at $1,491. The VIX fell 0.69 (!) to 17.55. 
    Stocks are oversold and due for a technical bounce. And the headlines are predicting doom! Dr. Irwin Kellner is warning: Don’t be fooled by the money illusion. David Weidner warns: Beware if this market goes off its meds . SmartMoney writes about The invisible stock bubble. Mark Hulbert notes that Low-quality stocks still lead, that the Fed's easy money is allowing junk stocks to outperform blue chips at a time when the blue chips should be leading the markets, and that sooner or later, small stocks will fall while big caps rise: "Indeed, according to Grantham, he is hard pressed to find other times in U.S. stock market history when quality (large-cap value) has been as undervalued as it is today, relative to junk (small-cap growth)."
    Then there's How far will home prices fall? and Fund managers in a gloomy mood. Surely it's time to sell all our stocks and switch to cash ahead of the second dip in this Great Recession!
    Michael Ashbaugh observes that S&P, Nasdaq challenge the 50-day average.
    Stock market futures are up tonight..


2011-5-16 (Monday Night):  The markets fell again today as the dollar rose against the Euro. The NASDAQ Composite dropped 46.16 points (-1.63%) to close at 2,782.21. The Dow lost 47.38 points (-0.38%) to close at 12,548.37, while the S&P 500 retreated 8.3 points (-0.62%) to close at: 1,329.47. Oil dropped to $96.95; Gold slipped to $1,491. The VIX climbed 1.17 to 18.24. 
    One factor may have been the arrest of the International Monetary Fund's Dominique Strauss-Kahn on sexual assault charges.
    Stock market futures are down again tonight, presaging another bad day tomorrow. However, so far, the market indices are still comfortably above their 50-day moving averages.
    TopStock Portfolios observes that with the markets held hostage to hedge-fund computer games, it's hard to know what's really going on in the underlying markets. 


2011-5-13 (Friday Night): The dollar rose and the markets rose today, after initially falling on less-than-stellar economic news: Dow declines for the week. The NASDAQ Composite added 34.57 points (-1.21%) to close at 2,828.47. The Dow gained 100.17 points (-0.79%) to close at 12,595.75, while the S&P 500 advanced 10.88 points (-0.81%) to close at: 1,337.77. Oil dropped to $99.34; Gold tumbled to $1,494. The VIX climbed 1.04 to 17.07. 
    David Moenning observes that Wall Street it running the same old  dollar-up-stock-markets-down play that has worked so well for them over the past year or so. When threatening economic clouds appear out side the U. S., foreign money seeks the safe haven of the world's reserve currency, the U. S. dollar, the dollar rises, and U. S. stock markets fall: Run It Again!. Berkshire Hathaway's Charlie Munger warns that high-frequency trading (HFT) is a legalized form of using inside knowledge to play the stock market: Berkshire's Munger: HFT is Legalized Front Running.


2011-5-12 (Thursday Night): The dollar fell and the markets rose today, after initially falling on less-than-stellar economic news: Business Inventories Rise in March, Bloomberg Consumer Confidence Index Falls, Producer Price Index Comes In Hotter Than Expected, Retail Sales Up +0.5% in April But Below Consensus, Weekly Jobless Claims Pull Back But Still Above 400K, Eurozone Industrial Production Below Expectations in March, and China Continues to Tighten; Increases Bank Reserve Requirement. The NASDAQ Composite added 26.83 points (0,63%) to close at 2,863.04. The Dow gained 65.89 points (0.52%) to close at 12,695.92, while the S&P 500 advanced 6.57 points (0.49%) to close at: 1,348.65. Oil dropped to $98.14; Gold declined to $1,5104 The VIX slipp 0.92 to 16.03. 
    David Moenning reiterates yesterday's explanation that the market indices are inversely tied to the strength of the dollar: Once More For Emphasis
    To me, the day's most important news is buried in this article: Investor Spotlight: When John Paulson Talks, People Listen. Mr. Paulson is the president and founder of the hedge fund that bears his name, and is a legend in the hedge fund industry. He foresees a rise of about 34% from here, presumably over the next two or three years. That would take the S&P 500 from its current level of about 1,350 to 1,800. Direxion's large-cap bull 3X ETF, BGU, should approximately double from here. For example, in the chart below, the Dow Jones Index

increased about 32% by April, 2010, while BGU was up a little more than 100% at that same  time.
    Michael Ashbaugh has published an article analyzing today's price action:Dollar strength sends S&P back to the range.
    The commodity sell-off: What’s next?  
    Tomi Kilgore writes: Equities finally seeing light on the economy.  
    Chuck Jaffe has written: Inflation diet: same price, less product, and Peter Brimelow tells of Two hard-asset letters still confident.
    Market futures are down a bit tonight.


2011-5-11 (Wednesday Night): The dollar rose and the markets fell today. The NASDAQ Composite lost 26.83 points (-0.93%) to close at 2,845.06. The Dow retreated 130.33 points (-1.02%) to close at 12,630.33, while the S&P 500 dipped 15.08 points (-1.11%) to close at: 1,342.08. Oil dropped to $99.52; Gold declined to $1,5104 The VIX rose 1.04 to 16.95. 
    David Moenning sums up nicely the gap between the frothiness of the news and the underlying realities: Making It Difficult. He observes that news mavens come up with all sorts of excuses why the market has gone up or down when, in reality, it depends only upon the dollar.


2011-5-10 (Tuesday Night): The markets closed up yet again today. The NASDAQ Composite gained 28.64 points (1.01%) to close at 2,871.89. The Dow advanced 75.68 points (0.6%) to close at 12,760.36, while the S&P 500 added 10.87 points (0.81%) to close at: 1,357.16. Oil jumped to $103.65; Gold rose to $1,516. The VIX fell 1.25 to 15.91. 
    David Moenning sums up nicely the gap between the frothiness of the news and the underlying realities: Making It Difficult. He observes that when the dollar goes down, dollar-denominated assets, including the U. S. stock market, go up. What most of the financial media do is give a "balanced" (no commitment) review of what's happening. In the meantime, I believe the S&P 500 will fulfill the prediction that it will cross something like 1,450 on or around the first of September. That' 112 days from now. It closed today at 1,357, so it would have to gain something like 93 points over the next 112 days. It rose almost 11 points today. Obviously, it's going to have to do a lot of backing and filling if it is to rise only 93 points in 112 days. 
    What we're seeing at the moment is a market that has been moving higher over a period of 26 months, with lots of pullbacks along the way. From April 26, 2010, when it peaked at 1,220, to February 18, 2011, when it peaked at 1,344, it rose about 120 points over a period of about 10 months, or about 12 points a month. From February 18, when it peaked (as mentioned above) at 1,344, to May 2, when it peaked at about 1,370, it rose at a rate of about 10 points a month. At that rate, it would hit approximately 1,410 by September 1, and 1,450 by year's end. 

    Of course, this is all absolutely dodgy. The markets will presumably roll over when they reach their cyclical bull market peaks. I would expect the S&P 500 to at least revisit its 2007 bull market peak, and I would expect to see that occur in 2012. But in the meantime, sophisticated investors are going to have to be repeatedly convinced that the economy is getting ready to nosedive. That's the only way they can be euchred into taking losses on some of their carefully chosen investments. I'm personally thinking in terms of long-term investments in the major indices, either in leveraged ETFs or in long-term, deep-in-the-money calls on leveraged ETFs.
    Michael Ashbaugh has written: Ashbaugh- S&P shrugs off commodity crash
    Market futures are up slightly tonight.


2011-5-9 (Monday Night): The markets closed up again today. The NASDAQ Composite gained 15.89 points (0.55%) to close at 2,843.25. The Dow advanced 45.94 points (0.36%) to close at 12,684.68, while the S&P 500 added 6.09 points (0.45%) to close at: 1,346.09. Oil ended at $100.90; Gold rose to $1,509. The VIX fell 1.24 to 17.16. 
    Peter Brimelow has written: Does dollar strength herald another crash?.  Mark Hulbert warns us to  Get ready for another flash crash.     TopStock Portfolios says, Technical Talk: Sideways Is Good Right About Now. Another article suggests "establishing some 'shorts' for a 2 to 4 day trade". In A Lack of Conviction? , David Moenning suggests that a current fall in the stock market could be simply tied to a temporary rise in the dollar.
    Market futures are flat tonight.


2011-5-7 (Saturday Night): The markets closed up a little, although not much considering the good news on the job front. The NASDAQ Composite gained 12.84 points (0.46%) to close at 2,827.56. The Dow advanced 139.41 points (0.43%) to close at 12,638.74, while the S&P 500 added 5.1 points (0.38%) to close at: 1,340.20. Oil plummeted to $98.06; Gold rose to $1,489. The VIX was unchanged at 18.40. 


2011-5-5 (Thursday Night): The markets fell again today, though they haven't yet violated support. The NASDAQ Composite gave up 13.51 points (-0.48%), about the same as yesterday to close at 2,814.72. The Dow drooped 139.41 points (-1.1%) to close at 12,584.17, while the S&P 500 lost 12.22 points (-0.91%) to close at: 1,335.10. Oil plummeted to $100.28; Gold plunged to $1,489. The VIX rose 1.12 to 18.20. 

To be continued in the morning.


2011-5-4 (Wednesday Night): The markets fell again today, though they haven't yet violated support. The NASDAQ Composite gaveup 13.39 points (-0.47%) at 2,828.23. The Dow drooped 83.93 points (-0.66%) to close at 12,723.58, while the S&P 500 lost 9.3 points (-0.69%) to close at: 1,347.32. Oil dropped a little to $108.55; Gold fell back to $1,533. The VIX rose 0.38 to 17.08.  
    Between Amber and car trouble, I've had no time for typing again today.  
    My intuitive feeling is that there isn't enough fear and contemplation of economic disaster yet to warrant an imminent rise in the stock market. It's going to take the anticipation of financial ruin to build a contingent of short sellers who can be sucker-punched by a surge in the markets. 
    Michael Ashbaugh writes about: Strong charts vs. weak season.  
    Irwin Kellner tells us about The Fed’s impossible dream.  
    Stock trading snafu should worry investors    
    Hulbert: Partying like it's 1999 and Funny thing happened on way to bank.  
    Fed's Williams: Inflation will ease later this year        


2011-5-3 (Tuesday Night): After yesterday's retreat, the major indices dipped a little further today, presumably digesting the galloping gains they registered while I was incomunicado. The NASDAQ Composite sld 22.46 points (-0.78%) at 2,841.62. The Dow squeegeed up 0.15 points (0.0%) to close at 12,807.51, while the S&P 500 fell 4.6 points (-0.34%) to close at: 1,356.62. Oil dropped a little to $110.69; Gold fell back to $1,533. The VIX was unchanged at 16.70.
The rest of this will have to come in the morning.


2011-4-26 (Tuesday Night): The stock market indices powered through overhead resistance  and out of their trading ranges today, with all three reaching new highs for this bull market cycle: Street gets earnings bump. The NASDAQ Composite closed up 21.66 points (0.77%) at 2,847.54. The Dow leaped 115.49 points (0.93%) to close at 12,595.37, while the S&P 500 jumped 11.99 points (0.9%) to close at: 1,347.24. Oil dropped a little to $111.95; Gold fell back to $1,507: Gold's 8-day run halted. The VIX fell 0.16 to 15.62.  
    So what should we do now? The markets have certainly climbed a wall of worry. Just a week ago today, it looked as though the stock market was heading for the basement. Now it's making

new highs. I was certainly caught flat-footed by this. (I had loaded up on the Direxion Daily Small Cap Bull 3X shares at $82.65 a share, but I sold them at a negligible profit last Tuesday. Now they're running $91 a share.)  
    My guess would be that now is the time to stock up on stocks, in keeping with Michael Ashbaugh's advice: S&P 500 rattling the cage: Ashbaugh
    TopStock Portfolios hasn't issued a "buy" signal, which is conspicuous by its absence. Of course, the markets thrive on doing the unexpected. Everyone knows that the markets have broken out of their two-month trading ranges, and everyone knows that it's safe now to pour money into the markets... isn't it? But as the above chart shows, last August, the indices hit a breakout peak, only to fall back down again. (Michael Ashbaugh observes that their upside-down head-and-shoulders patterns are "a high-reliability bullish reversal pattern.") 
    This comment on their website may explain why: Quick Comments: Jailbreak!
    My own thinking is to put the bulk of my money into either a 2X (MVV) or a 3X (BGU) S&P 500 ETF. The downside to this is that if the market dips, say, 20% from its peak value, a fund like BGU would drop 60%, to 2/5ths of its peak value. The S&P 500 would have to gain 25% to get back where it was before the 20$ correction. If the S&P 500 rose by 25%, BGU would rise by 75% but that would only take BGU to 2/5 X 7/4 = 14/20 = 07. = 70% of its peak value before the correction. So you have to get out of a fund like BGU before it goes very far down. For that now-and-then situation, I plan to rely on the Daily Decision timing strategy to get me out of BGU in a timely manner. 
    Market futures are up a bit tonight.


2011-4-25 (Monday Night): The markets took a breather today as the oversold dollar rose slightly on foreign currency exchanges: Street takes step back, U.S. dollar trims its losses. The NASDAQ Composite closed up 5.72 points (0.2%) at 2,825.88. The Dow fell 26.11 points (-0.21%) to close at 12,479.88, while the S&P 500 shed 2.13 points (-0.16%) to close at: 1,335.25. Oil dropped minutely to $112.33 , while Gold hit yet another new high at $1,511: Gold jumps for eighth day, Brimelow: Russell endorses gold-bug theory. The VIX fell 1.08 to  15.77.  
    Brett Arends writes Age of America near end in response to a prediction by the International Monetary Fund that China's Gross Domestic Product (GDP) will surpass that of the U. S. in five years (2016). Of course, China's per capita GDP will still be only about ¼th that of the United States... it will be the middle of the century before China's per capita GDP overtakes that of the U. S....  but China's influence on the world economy will eclipse that of the U. S. in only five more years. He mentions that other Asian countries would rather see a U. S. hegemony than a Chinese hegemony.
    Rex Nutting writes about the time it's going to take to get the U. S. economy fully functioning again: Patience and the recovery.
    Stock market futures are down slightly tonight.  


2011-4-21 (Thursday Night): The markets climbed again today on positive earnings reports and upbeat forecasts: Bulls have Good Thursday, Leading indicators up. The NASDAQ Composite closed up 17.64 points (0.63%) at 2,820.16. The Dow added 52.45 points (0.42%) to close at 12,505.99 (a new high for the year), while the S&P 500 jumped 7.02 points (0.53%) to close at: 1,337.38. Oil stayed put at $112.33 (Obama: Panel to monitor 'speculators' on gas), while Gold slipped to $1,505. The VIX fell 0.38 to  14.69.  
    There was bad news mixed with the good news today. Weekly jobs claims fell, but not as much as they were expected to fall: Weekly Jobless Claims Fall 13,000 But Above Expectations. The Philadelphia Fed manufacturing index was only up 18.5 versus an expected value of 35.5: Economic Update: Philadelphia Fed Index. Also, housing prices fell more than expected in February: Housing Update: House Price Index. Finally, a Treasury auction of 5-year TIPS (Treasury Inflation-Protected Securities) sold at a negative interest rate of 0.18% today: What it means that TIPS yields are negative. The reason is that the buyers of these TIPS believe that inflation will average more than 2.35% over the next five years
   This article, It's Baaaaack!, refers to the fact that suddenly, the "risk trade" is back on.  
   Only the Dow broke out to new highs today. Meanwhile, the S&P is less than 7 points away from surpassing its February intra-day high of 1,344.
    Market futures are neutral tonight. (Some backing and filling wouldn't be a surprise, given the rapid run-ups over the past three days.)


2011-4-20 (Wednesday Night): The markets soared today on stellar earnings reports: U.S. stocks leap on Intel, home sales. The NASDAQ Composite closed up 57.54 points (2.1%) at 2,802.51. The Dow catapulted 186.79 points (1.52%) to close at 12,453.54, while the S&P 500 jumped 17.74 points (1.35%) to close at: 1,330.36. Oil rose to $112.22 (Crude futures break through $112 a barrel, Oil prices likely to keep rising until June), while Gold jumped to $1,507. The VIX fell 0.76 to  15.07.  
    Michael Ashbaugh warns that S&P 500 in caution zone: Ashbaugh
    From TopStock Portfolios: The Bulls May Be Back, But Here's Two Things To Noodle On.
    Last night, I wrote: " The key question is: will this rebound continue? Resistance levels lie at 1,310, 1,315, and 1,320 on the S&P 500. The S&P 500 has closed above 1,310 tonight, but it didn't surmount the other two hurdles today." Tonight, that question has been answered resoundingly. The indices broke through their resistance levels as though they weren't there. And market futures are up substantially tonight on the basis of excellent after-hours earnings reports. 


2011-4-19 (Tuesday Night): The markets partially recovered today (stalling out at their support levels) on the strength of good news: Housing picks up pace, Street holds on to gains, U.S. stocks rise on J&J profit, steelmaker rally, and U.S. stock indexes lifted by earnings. The NASDAQ Composite closed up 9.59 points (0.35%) at 2,744.97. The Dow advanced 65.16 points (0.35%) to close at 12,266.75, while the S&P 500 progressed 6.28 points (0.48%) to close at: 1,311.41. Oil rose to $108.12, while Gold jumped to $1,496: Gold flirts with $1,500, Gold's bounce-back on dips a good sign. The VIX fell 1.16 to  15.79.  
    Michael Ashbaugh warns that S&P 500 in caution zone: Ashbaugh
    From TopStock Portfolios: One Trader's View of the Action and a Bullish Omen. Also from TopStock Portfolios: Technical Talk: The Key Question Is...  
    The key question is: will this rebound continue? Resistance levels lie at 1,310, 1,315, and 1,320 on the S&P 500. The S&P 500 has closed above 1,310 tonight, but it didn't surmount the other two hurdles today.
    Tonight's after-hours reports showed Intel, IBM, and Yahoo beating analysts' expectations handily, as well as providing upbeat guidance going forward: Intel climbs, IBM lags late, IBM earnings climb 10%, VMware beats targets with strong growth, Wynn profit soars on Macau growth, and Yahoo beats the Street. As a result, market futures are up somewhat tonight (about ⅓ %, although as we saw last night anything can happen between night and morning). 
    The markets rose today only about rd as far as they fell yesterday. Still, they held at the S&P 1,300 level, and showed remarkable resiliency in the face of a load of bad news: Ben Stein talks investing (video), and Game Changers?


2011-4-18 (Monday Night): The markets skidded off the road today. Standard & Poors cut its long-term outlook for U S. debt from stable to negative: Stocks sink after U.S. outlook slashed. The NASDAQ Composite closed down 29.97 points (-1-06%) at 2,73538. The Dow plummeted 140.24 points (-1.14%) to close at 12,201.59, while the S&P 500 regressed 14.54 points (-1.1%) to close at: 1,305.14. Oil rose to $109.39, while Gold jumped to $1,487: Gold, copper prices raise the stakes for miners: Gold hits record; silver at 31-year high. The VIX rose 1.64 to  16.96.  
    Unfortunately, today was the last day to file income taxes, and I had last-minute details to clear up, so I couldn't take time to update this website.
    What are we to make of today's price plunge?
    One Marketwatch pundit has written: Final stage of the bull market? He's arguing that the markets will either enter a final "blow-off" phase in which the major indices rise, in a final push, an additional 30% (to 1,700 for the S&P 500?) to 50% (to 2,000 for the S&P 500?), or they'll plunge to or below 1,250 on the S&P 500. The point is: they won't sidle sideways.
    The TopStock Portfolios advisory service is more pessimistic, a position that seems to be in the cards, with market futures down sharply again tonight.


2011-4-15 (Friday Night): At the end of a very choppy day, the markets closed up less than half a percent. The NASDAQ Composite closed up 4.43 points (0.16%) at 2,764.65. The Dow rose 56.68 points (0.46%) to close at 12,341.83, while the S&P 500 progressed 5.16 points (0.39%) to close at: 1,319.68. Oil rose to $109.39, while Gold jumped to $1,487: Gold hits record; silver at 31-year high. The VIX fell 0.95 to  15.32.  
    Among the interesting articles today were Mark Hulbert on How to forecast a stock-market top, Using volume to play the market: Dormeier, Bull market faces big test: Howard Gold, and Watch out for small caps: Arends. Of possible interest might be Rare find in rare-earth elements: Kerr.
    With respect to the question: "What does the stock market do next?", I don't want to speculate. The markets have risen for the past two days, but whether that's the beginning of their recoveries or just bounces on their way down is more than I can say.


2011-4-14 (Thursday Night): After plunging on bad news this morning, Stocks waver after jobs data, earnings caution, U.S. wholesale prices rise 0.7% in March, the markets ended about where they started: Stocks get late-day lift, Stocks close flat as oil rises again. The NASDAQ Composite slipped 1.3 points (-0.05%) to 2,760.22. The Dow rose 14.16 points (0.12%) to close at 12,285.15, while the S&P 500 gained 0.11 points (0.01%) to close at: 1,314.52. Oil rose to $108.46, while Gold jumped to $1,475 The VIX fell 0.65 to  16.27.  
    Meanwhile, the news is lightening up: Detrick: market at plateau, not at edge of cliff, And stock prices are resilient: Stocks claw way back to positive territory. TopStock Portfolios' David Moenning wrote this morning: The Wait Is Almost Over
    Stock futures are flat tonight.


2011-4-13 (Wednesday Night): Today's Dow and S&P market profiles looked a lot like yesterday's market profiles, although they were all up for the day. (The NASDAQ was up substantially all day.) So far, the Dow and S&P 500 have bounced off their resistance levels.  The NASDAQ Composite climbed 16.73 points (0.61%) to 2,761.52. The Dow popped 7.41 points (0.06%) to close at 12,270.99, while the S&P 500 gained 0.25 points (0.02%) to close at: 1,314.41. Oil rose slightly to $107.23, while Gold tiptoed up to $1,457 The VIX fell 0.17 to  16.92. 
     One of the more interesting articles tonight is The Valuation Debate- Pick Your Side. This article rebuts Mark Hulbert's article last night, History bodes ill for stock market, that argued that stocks are overvalued. In another article, Are They Real-, David Moenning asks whether the fears drawing down the markets are realistic.
     Robert Powell observes that there's No room for error in earnings season.
    Market futures are neutral-to-slightly-down tonight. 


2011-4-12 (Tuesday Night): Today, the markets went down for reasonable reasons: Stocks, oil take a pounding. The NASDAQ Composite slid 26.77 points (-0.96%) to 2,744.79. The Dow careened 117.53 points (-0.95%) to close at 12,263.58, while the S&P 500 lost 10.30 points (-0.78%) to close at: 1,314.16. Oil dropped to $106.02, while Gold fell back to $1,455 The VIX jumped 0.5 to  17.09. 
 
   Last night, I wrote: " I'm not seeing talk about a double-dip recession tonight, but surely, that's coming soon." Well, today was suddenly "Gloomsday": Recovery worry hits stocks. Mark Hulbert, who's been writing columns proclaiming the bull market, today wrote: History bodes ill for stock market. Another headline reads, • Gas prices expected to rise 40% this summer. (It turns out that the 40% rise refers to the average price of gasoline last summer versus the average price of gasoline this summer... not a 40% rise from here.) Michael Ashbaugh's Tuesday column is entitled, S&P 500 drops to major technical test. Brett Arends' Tuesday article is titled: Why Europe’s debt crisis isn’t over. Among the downers may have been reductions in the estimates for U. S. GDP growth in 2011: GDP estimates slashed, together with U.S. runs $188 billion deficit in March, Trade activity softens, Prices for U.S. imports jump, U.S. needs to cut deficit soon, IMF says, Small-business survey worsens, and Inflation stokes fears over shopper resilience.... all bad news appearing suddenly on a "down" day. There were two upbeat articles: Seize the moment on equities: Cohan and Bears, bugs still respect the bull.
    TopStock Portfolios asks: Bears Finally Finding Their Mojo?
    The S&P 500 index closed at its 25-day moving average after bouncing off its 75-day moving average at its mid-day low.
    Right or wrong, I'm treating this as an opportunity to back up the truck and load up on TNA (the Direxion Daily Small Cap Bull 3X Shares). (One fact that concerns me is that the chart pattern for the S&P 500 and the NASDAQ Composite doesn't look healthy to me.)
    Stock market futures are up a bit tonight.  


2011-4-11 (Monday Night): Today, the markets went down because they wanted to. The NASDAQ Composite slid 8.91 points (-0.32%) to 2,771.51. The Dow gained 1.06 points (0.01%) to close at 12,381.11, while the S&P 500 lost 3.71 points (-0.28%) to close at: 1,324.46. Oil dropped to $108.23, while Gold fell back to $1,457 The VIX was unchanged at 16.59. 
   
The most significant news tonight is that market futures are down sharply and falling tonight: Blah day for Wall Street. It looks as though the gap at 1,319 is going to be filled in. I'm not seeing talk about a double-dip recession tonight, but surely, that's coming soon. 
    I'm going to consider this a buying opportunity, although I'll wait until the market seems to heave bottomed.


2011-4-8 (Friday Night): Today was the same story as yesterday, except that today, it was $113 oil along with the impending government shutdown that did the markets in. The NASDAQ Composite slid 15.72 points (-0.56%) to 2,780.42. The Dow dropped 29.44 points (-0.24%) to close at 12,380.05, while the S&P 500 skidded 5.34 points (-0.4%) to close at: 1,328.17. As mentioned above, Oil closed above $113 a barrel at $113.05, while Gold registered yet another new high of $1,476. The VIX rose 0.76 points to 17.87.    
    The S&P 500 got down to 1,324 today. Unfortunately, the gap that needs to be filled lies between its high of 1,319.45 on March 29th and its low of 1,321.89 on March 30th, so today's action didn't eradicate the gap. Of course, the markets are allegedly overbought on a short-term basis, and the price of oil may rise from here, leading to further pullbacks. But hopefully, by the end of next week, the markets will be back on track. Now may be a good time to buy.
    Part of today's sell-off may have stemmed from concerns over what might happen this weekend.
    There's very little other news on this Friday night. The movers and shakers have taken the weekend off.
News Update:
    It has just been announced that a U. S. government shutdown has been averted, and that a consensus budget should be passed next Tuesday or Wednesday. This eleventh-hour reprieve should alleviate budget concerns that may have adversely affected the equity markets. 


2011-4-7 (Thursday Night): The bulls appeared to be heading for another new high today when all of a sudden, news of Japan's Richter 7.1earthquake broke over the markets, followed by oil priced above $110 a barrel: U.S. stocks slide after quake hits Japan. The markets swooned and then partially recovered.  The NASDAQ Composite retreated 3.68 points (-0.13%) to 2,796.14. The Dow dipped 17.86 points (-0.14%) to close at 12,409.49, while the S&P 500 fell 2.03 points (-0.15%) to close at: 1,333.51. As mentioned above, Oil closed above $110 a barrel at $110.23, while Gold registered a new high of $1,460. The VIX rose 0.21 points to 17.11.  
    China data spark slew of upgrades
    Tomi Kilgore argues that the fact that the Dow Theory "buy" signal occurred on low volume doesn't mean that it isn't a valid prognosticator of a bull market: Low volume doesn’t cancel buy signal.
    Mark Hulbert writes: Bull market is alive and well
    Michael Ashbaugh's weekly column is entitled: Starting the second quarter on an upswing
    Articles that I like are posted on the TopStock Portfolios website. Their take on the next week is that (1) stocks are overbought, and (2) their inverse ETF market indicator is pointing toward a modest downturn over the next few trading days.
    Right now, I'm setting myself up with January 21, 2013, $40 calls on SSO, the Proshares Ultra S&P 500 ETF. These options currently cost about $16, with SSO at $54. That means I'm paying $2 in "rent" ($40 + $16 - $54) to "own" 100 shares of SSO (equivalent to 200 shares of SPY) between now and next January. That yields leverage from 5-to-1 to 6-to-1 on the S&P 500. If the S&P 500 rises 10% between now and September, per Sam Eisenstadt's A bullish six-month forecast , my $40 calls will rise 50% over that interval.
    A $54, at-the-money, January, 2012, call costs about $6, and would give higher leverage, but its value will decline as we get closer to the strike date of January, 2012, losing about $3 by September. However, it should still rise about 100% over the interval.
    Market futures are up a little tonight.   


2011-4-6 (Wednesday Night): Once again, the bulls have foiled the bears by inching slightly higher.  The NASDAQ Composite rose 8.63 points (0.31%) to 2,799.22. The Dow annexed 32.85 points (0.27%) to close at 12426.75, while the S&P 500 rose2.91 points (0.22%) to close at: 1,335.54. Oil tolled the knell of parting day at $108.46 a barrel, while Gold rose to $1,458. The VIX fell 0.25 points to 17.25.
   
Perhaps the most important happening today was that the Dow closed above 12,400, confirming the Dow Theory "buy" signal. Meanwhile the S&P 500 closed 6½ points below its previous 2011 high (1,343), after flirting with a level (1,339) four points below that value.
    No to stocks — and to bonds
    Rates to rise in 2012?
    Market futures are neutral tonight.


2011-4-5 (Tuesday Night): For the second day in a row, the markets ended about where they started as they challenge their pre-correction highs. The NASDAQ Composite rose 2.00 points (0.07%) to 2,791. The Dow slipped 6.13 points (-0.05%) to close at 12,363.90, while the S&P 500 lost a trivial 0.24 points (-0.02%) to close at: 1,332.24. Oil said "sayonara" at $108.00 a barrel, while Gold rose to $1,455. The VIX fell 0.25 points to 17.25.
    TopStock Portfolios expects the markets to fall back slightly, with the S&P 500 filling in a gap at 1,320 (about 12 points below where it closed tonight). However, they aren't expecting a meltdown or a double-dip recession: Technical Talk- Same Song, Different Day. They also note that 1st Quarter GDP Forecasts Cut At Major Investment Firms, in part because of higher crude oil prices. Mark Hulbert cites Sam Eisenstadt, Value Line's former research director, who has an excellent track record predicting what the economy and the stock markets will do. He's calling for a September 30 S&P 500 reading of 1,450, or about 9% above where the S&P stands today: A bullish six-month forecast
    Market futures are up slightly tonight.

2011-4-5 (Tuesday Morning): I'm sorry to be half a day late in posting this. Amber fell asleep around 5 p. m. last night, and woke up hungry and energetic at 10 p. m. It was after midnight before we got her asleep again, and could fall into bed.
    The markets are retesting their resistance levels again this morning.


2011-4-4 (Monday Night): The markets ended the day about where they started. The NASDAQ Composite declined a negligible 0.41 points (-0.01%) to 2,789.19: Nasdaq ends win streak. The Dow increased 23.31 points (0.19%) to close at 12,400.03, while the S&P 500 gained a paltry 0.46 points (0.03%) to close at: 1,332.87. Oil bid the day adieu at $108241 a barrel, while Gold vamoosed at $1,438. The VIX rose 0.1 points to 17.50..
    The indices are facing major resistance as they approach their pre-correction highs. There's still the possibility that they could retreat from their current levels and slide to new lows. But it's  time for a pause, if not a brief pullback, or a sideways consolidation..
    Fed chairman Bernanke stated today that the current bout of incipient inflation will prove "transitory".
    Stock market futures are down a bit tonight.


2011-4-1 (Friday Night): The markets soared this morning on the back of a positive jobs report (In charts: Jobless rate) and encouraging remarks by the Fed, and then sagged into the close as oil topped $108 a barrel. The NASDAQ Composite ascended 8.53 points (0.31%) to 2,789.60. The Dow increased 56.99 points (0.46%) to close at 12,376.72, while the S&P 500 gained 6.58 points (0.5%) to close at: 1,332.41. Oil ended the day at $108.31 a barrel, while Gold closed at $1,429. The VIX fell 0.26 points to 17.14..
    The S&P 500 index closed tonight 11 points below its highest close  before the recent correction began. As the trend lines show below, it still

has some way to go... a gain of 40 to 60 points... to catch up with either one of them. One of its notable features is that its rate of rise since it bottomed on March 16th is shallower than the recoveries from other pullbacks (only slightly steeper than the trend line it's chasing), although it matches the latter half of the recovery from last August's decline. After that, stock prices could continue to rise for a month or two before any further major  setback occurs.
    On the other hand, the marketplace is full of surprises. For example, at some point, oil prices could once again engage the attention of the stock market. 
   In his article, In charts: Jobless rate, Mark Hulbert notes that investor sentiment is more pessimistic and anxious than it was on January 1st, which is very bullish for stocks. He also notes that the Dow Jones Industrial Average is close to flashing a strong market "buy" signal Waiting for the signal, All-clear signal for stocks? A close above 12,393, 16 points above where it closed tonight, would confirm a recent new high in the Dow Jones Transportation Average and augur a Dow Theory Forecast "buy" signal.
    Another article warns that it would be wise to "sell in April and go away": April strength makes for a great market exit.


2011-3-31 (Thursday Night): The markets closed mixed today, with the NASDAQ up a few points and the Dow and the S&P down a few points: Big hopes for jobs report. The NASDAQ Composite rose 4.8 points (0.15%) to 2,781.07. The Dow fell 30.88 points (-0.25%) to close at 12,319.72, while the S&P 500 retreated 2.43 points (-0.18%) to close at: 1,325.83. Oil ended the day at $104.62 a barrel, while Gold closed at $1,427. The VIX was unchanged at  17.74..
   The markets are waiting for tomorrow' monthly jobs report. About the only real news is that the the Fed's Kocherlakota says 2011 hikes 'possible'.
    Should you sell in April and go away?
    Market futures are up slightly tonight,


2011-3-30 (Wednesday Night): The markets reached new two-year highs: Dow soars to 6-week high. The NASDAQ Composite added 19.9 points (0.72%) to 2,776.79. The Dow gained 71.6 points (0.58%) to close at 12,350.61, while the S&P 500 advanced 8.82 points (-0.67%) to close at: 1,328.26. Oil ended the day at $104.62 a barrel, while Gold closed at $1,427. The VIX was unchanged at to 17.71
    The chart below shows how the recovery is coming:

The markets are due for a consolidation soon. Market futures are down slightly tonight.
    Obama outlines oil plan.
    Rex Nutting writes, On inflation, don’t believe your eyes.


2011-3-29 (Tuesday Night): To my surprise, the markets rose again today: Street powers back higher. The NASDAQ Composite added 12.38 points (-0.45%) to 2,730. The Dow gained 22.71 points (-0.19%) to close at 12,197.88, while the S&P 500 advanced 3.67 points (-0.27%) to close at: 1,310.19. Oil ended the day at $103.41 a barrel, while Gold closed at $1,420. The VIX was unchanged at to 19.24
    I personally expect to see the markets climb as the recovery continues.       
    Ashbaugh stakes out bull-bear battleground      
    The next oil shock?    
    Confidence slides in March.  
    Irwin Kellner has written, Home prices slide, but end may be near.  
    Market futures are up slightly tonight.  
      
2011-3-29 (Tuesday Afternoon): Most of what I would have said last night has been overtaken by today's events.


2011-3-28 (Monday Night): The markets fell a little today on light volume. The NASDAQ Composite gave up 12.38 points (-0.45%) to 2,730. The Dow dipped 22.71 points (-0.19%) to end at 12,197.88, while the S&P 500 gave backed 3.67 points (-0.27%) to close at: 1,310.19. Oil ended the day at $103.41 a barrel, while Gold closed at $1,420. The VIX was unchanged at to 19.24
    I've run of of time tonight. I'll have to finish this tomorrow.
    Market futures are flat tonight.


2011-3-27 (Sunday Night): Stock market futures are flat tonight, and the markets are on the edge between "buy" and "go to cash".


2011-3-25 (Friday Night): The markets rose a little more today in a way that points toward a not-unexpected down day early next week: Bulls have the bears' number. The NASDAQ Composite increased 6.64 points (0.24%) to 2,743.06. The Dow gained 50.03 points (0.41%) to end at 12,220.59, while the S&P 500 incremented 4.14 points (0.32%) to close at: 1,313.80. Oil ended the day at $105.52 a barrel, while Gold closed at $1,430. The VIX fell to 17.09
      
      
    The chart above shows how this retrenchment looks in relation to other ups-and-downs over  the past year. The S&P 500 has successfully broken through its resistance at 1300 but has bounced down from 1320. It's now up 70 points from its low, with the potential for, perhaps, about 40-to-50 additional points of "upside potential" to catch up with its bullish trend line. Of course, presumably, it will then continue to rise, albeit at a slower pace. 
    The catalyst for today's market rise was probably the fact that last year's 4th quarter GDP was revised upward to 3.1%: GDP: An even higher all-time high.
    There are two commentaries on inflation from Fed members: Consumer-sentiment index falls in March and Plosser: Funds rate should hit 2.5% in year
    Right now, I'm investing in the 2X S&P 500 ETF, SSO, to take advantage of the presumed stock market rebound. (I sold my position in SSO this afternoon in anticipation of a possible temporary market reversal on Monday morning, but I'll play it by ear on Monday, buying it back if the market moves up.) 


2011-3-24 (Thursday Night): Don't look now but the markets have been sneaking back up. The NASDAQ Composite added 38.12 points (1.41%) to 2,736.42. The Dow rose 84.54 points (0.7%) to 12,170.56, while the S&P 500 advanced 12.12 points (0.93%) to close at: 1,309.66. Oil ended the day at $105.21 a barrel, while Gold adjusted to $1,428. The VIX fell to 18.02
    Perhaps the most significant thing about today is that the markets broke above their resistance levels and are cleared for a resumption of the bull market: Cover Your Ears If You're a Bear . In particular, the markets are advancing in the face of bad news: Technical Talk: Back on the Bandwagon?  
    TopStock Portfolios' David Manning has some insights to share in Bad News For Stock Pickers: 'Risk Trade' May Be Here To Stay. The gist of this article is that stock-picking may be more-or-less a thing of the past. The problems he relates are that (1)  the investment community has begun to invest in the investment themes ("macro trades") that are in fashion at any given time (such as emerging markets, oil, shorting the markets, etc.), (2) investors are switching between "risk on/risk off" trading, and (3) the increasing use of ETF indexes in lieu of baskets of individual stocks. Mr. Manning explains that the "risk on/risk off" approach as follows:  
    "
The idea here is instead of spending time doing company research (which is VERY expensive and VERY time consuming, by the way), traders today simply “put risk on” (via leveraged ETF’s, futures and derivatives) when the news is good and the market is moving up, and then “go the other way” by taking risk off (and/or by putting shorts on) whenever things start to get ugly. The bottom line here is that using a risk on/off approach is quicker than stocks, easier than stocks, and much cheaper than creating, maintaining and trading baskets of stocks. So, if you are a fast-money type, there is no need to do any research on things as silly as earnings or company fundamentals when you can “bomb in” or out of the overall market or specific indices with the click of a button (or better yet, you can always program the computer to do it for you!)."
    Marketwatch's Tomi Kilgore writes, "Mob mentality is driving the markets". (I favor David Manning's interpretation.)
    Market futures are up about 0.3% tonight.


2011-3-22 (Tuesday Night): Last night, I wrote that, " Typically, the next move from here could be a dip or consolidation after the run-up of the past few days: Quick Comments: Better Safe Than Sorry. If so, it might be a good buying opportunity: Ready For The Rebound?. As it turned out, that's what happened. The NASDAQ Composite slipped 8.22 points (-0.31%) to 2,683.87. The Dow dipped 17.90 points (-0.15%) to 12,018.63, while the S&P 500 ponied up 4.61 points (-0.36%) to close at: 1,293.77. Oil hit a new high of $105.23 a barrel, while Gold adjusted to $1,429. The VIX fell to 20.21
    The logical next move might be a retest of last week's low. The fact that oil ran above $104 a barrel (and is now sitting above $105 a barrel) initiated a downward bias in today's markets. This bias is built into tomorrow's opening, with market futures down, and falling tonight. I know. You're saying, "That's ridiculous! The economy's moving up, and the markets are obviously going to follow the economy." But markets find a "wall of worry": Stocks face 'tremendous' risks, and toot out potential perils to worry about. Mark Hulbert's article tonight says, There’s a huge wall of worry out there. If the markets retest their lows, I'll wait until they start back up, and then I'll buy.


2011-3-21 (Monday Night): The markets rose resoundingly today, with the Dow climbing nearly 180 points. The NASDAQ Composite rose 48.42 points (1.83%) to 2,692.09. The Dow leaped 178.01 points (1.5%) to 12,036.53, while the S&P 500 vaulted up 19.18 points (1.5%) to close at: 1,298.38. Oil advanced to $102.54 a barrel, while Gold climbed to $1,431. The VIX fell to 20.61
    Typically, the next move from here could be a dip or consolidation after the run-up of the past few days: Quick Comments: Better Safe Than Sorry. If so, it might be a good buying opportunity: Ready For The Rebound?
    Marketwatch's William Watts writes, Dollar’s safe-haven status evaporates..
    Market futures are slightly lower tonight.   


2011-3-18 (Friday Night): The markets rose somewhat again today, although it was an up-and-down ride.  The NASDAQ Composite rose 7.62 points (0.29%) to 2,643.67. The Dow gained 83.93 points (0.71%) to 11,858.52, while the S&P 500 added 5.48 points (0.43%) to close at: 1,279.20. Oil was essentially unchanged at $101.62 a barrel, while Gold climbed to $1,419. The VIX ended at 26.44
    What happens next will depend upon this weekend's news.


2011-3-17 (Thursday Night): Today, the markets came part way back: Dow's best day in weeksThe NASDAQ Composite rose 19.23 points (0.73%) to 2,636.05. The Dow gained 161.29 points (1.39%) to 11,774.59, while the S&P 500 added 16.84 points (1.34%) to close at: 1,273.72. Oil jumped up to $101.70 a barrel, while Gold climbed to $1,404. The VIX rose 3.03 points to close at 26.37
    While today saw a nice little pop, it was far from a turnaround. In the meantime, the UN Security Council has approved air strikes and, sub rosa, perhaps other forms of interventions to stop Qaddafi from crushing his Libyan rebels: U.N. takes on Libya: "Military strikes expected within hours, reports say. Security Council votes 10 to 0 supporting 'all necessary measures,' including no-fly zone to protect civilians and rebel forces from Gadhafi."
    Oil has immediately jumped to $103 a barrel.
    So far, Japan's attempts to cool their reactor have been only partially successfu.
    Right now, market futures are up
0.8%.
    Brett Arends writes: Ten stocks to look at in the panic, while Jonathon Burton suggests that we: Buy what's used to rebuild.


2011-3-16 (Wednesday Night): The markets have fallen deeper today than they did yesterday.  The NASDAQ Composite closed down another 50.51 points (-1.89%) to 2,616.82. The Dow dipped 242.12 points (-2.04%) to 11,613.30, while the S&P 500 dropped 24.99 points (-1.95%) to close at: 1,256.88. Oil ended the day a little higher, at $98.28 a barrel, while Gold fell to $1,4397. The VIX rose 5.08 points to close at 29.40 after spiking above 31. 
    The market began climbing until 11 a. m. Eastern time. Then a remark that had been made several hours earlier and ignored, suddenly caught the attention Wall Street's  "headline-o-phagic" trading computers and triggered a massive stock sale. The remark was a statement by the European Union's energy chief, Guenther Oettinger, that the situation is out of control. He warned that there could be dire happenings within hours. 
    It should be noted that the worst thing that could happen would be a meltdown of one or more of the reactor cores, releasing a relatively small, highly radioactive plume into the atmosphere. Right now, the wind is blowing from the east, transporting colloidal radioactive solids away from the Japanese islands over the Pacific. As long as the continues to blow from the east, the results should be harmless (unless you're a fish swimming east of Japan). My guess is that these particles will settle out of the atmosphere fairly quickly, and that they will be washed out of the air by rainfall. Also, they'll be hugely diluted as the cloud expands into the vast expanse of the atmosphere. This Japanese catastrophe is being described as a debacle falling between Three-Mile Island and Chernobyl (which, I'm reading, was worse than Three-Mile Island by a factor of a thousand). Chernobyl caused no problems for the Americas, and we're being told that the same would be true for Fukushima reactors. 
    Tomorrow, a power line is being installed that will, hopefully, power the pumps that cool the reactor cores and spent-fuel pools: Japan Nuclear Update: New Power Line Could 'Solve Crisis', Hopes high of getting electricity to crippled Japan nuclear plant.
    Meanwhile, there's other ominous news: Saudi Shi'ites protest, support Bahrain brethren, and the fact that Inflation could stall recovery: Swonk (audio)
and Producer prices up 1.6% on food-price jump. Also, Housing's deep freeze.
    Mark Hulbert writes: Gold: Sell first — and then ask questions.
    Brett Arends presents Contrarian’s trouble with new bubble.
    Market futures are neutral tonight.   
    As the chart below shows, we're well past last November's decline.    


2011-3-15 (Tuesday Night): Same story as yesterday: the markets crashed at the beginning of the day but then partially recovered. The NASDAQ Composite closed down another 33.64 points (-1.25%) to 2,667.33. The Dow dipped 137.74 points (-1.15%) to 11,855.42, while the S&P 500 dropped 14.52 points (-1.12%) to close at: 1,281.97. Oil ended the day a little higher, at $97.95 a barrel, while Gold fell to $1,400. The VIX rose 3.19 points to close at 24.32: CBOE's VIX 'fear index' sees record volume.
    The news that has partially driven this market meltdown is the continuing threat of real reactor meltdowns, and their financial implications.    
    Michael Ashbaugh warns that U.S. indexes’ plunge points to new trend. The intermediate-term trend is now down.
    Topstock Portfolios is also looking for an extended correction period: Joined At The Hip? At the same time, because this is news-driven, it may end sooner than expected: Short-term hit seen to Japan economy. Mark Hulbert notes that: The retreat of the bulls may be good sign.
    Market futures are up a bit tonight, although a lot can change between now and morning.  


2011-3-14 (Monday Night): The markets partially recovered by the end of the day, but not enough to avoid triggering a "sell" signal: U.S. stocks finish in the red as Japan remains in focusThe NASDAQ Composite gave up 14.64 points (-0.54%) to 2,700.97. The Dow dipped 51.54 points (-0.43%) to 11,993.16, while the S&P 500 dropped 7.89 points (-0.6%) to close at: 1,296.39. Oil ended the day a little higher, at $100.59 a barrel, while Gold closed at $1,425. The VIX rose 1.05 points to close at 21.13.
    Today's price action took all three main market indices below their 50-day moving averages, which is generally a "sell" signal. So far, this is looking similar to last November, but it's far from over. 
    Market futures are way down tonight (1¼ %). Now it's time to short the markets. My choices for this purpose are SDS, the Proshares Ultrashort S&P 500 ETF (currently at $22), or TZA, the Direxion Daily Small Cap Bear 3X ETF (currently at $41.95). there's been a third explosion at Japan's Fukushima nuclear facility, causing dives in Asian markets and U. S. futures.

    A final update on whether or not to short the markets should be available from TopStock Portfolios tomorrow morning before the markets open.

2011-3-14 (Monday Noon): The markets have fallen into the basement. In particular, they've broken through their 50-day moving averages, as well as other resistance levels. However, it's still not quite time to short the markets (although that could change at any moment). To the extent to which this breakdown is news-driven, the markets could still recover. At the moment, the indices are in low-volume plateaus. They're currently setting up wedge patterns from which breakouts will soon occur. Usually, the indices break in the direction in which they were initially heading (in this case, down), and these wedges have the bottoms falling and the bottoms flat, suggesting further downward action. How the indices emerge from their plateaus should tell the tale. 
      


2011-3-11 (Friday Night): The markets rose smartly today, though it remains to be seen whether this marks a market recovery or whether it's a hump in a falling market.  The NASDAQ Composite rose 14.59 points (0.59%) to 2,715.61. The Dow gained 59.79 points (0.5%) to 12,044.40, while the S&P 500 added 9.79 points (0.71%) to close at: 1,304.28. Oil ended the day a little lower, at $100.59 a barrel, while Gold closed at $1,420. The VIX rose 1.8 points to close at 20.08.
     Mark Hulbert writes: March Madness and your portfolio 
     Howard Gold tells a cautionary tale: Dow 36,000 man back, with yet more advice
     Ethics editor Thomas Kostigan has an interesting article: Global trust in business is on the rise
     In my view, the best information of which I'm aware is to be found on the TopStock Portfolios website: Technical Talk: Bulls Trying To Hold On, and Taking Another Look?


2011-3-10 (Thursday Night): In the end, the markets closed below their resistance levels, but they went not gently into that good night. The NASDAQ Composite fell 50.7 points (-1.84%) to 2,701.02. The Dow plummeted 228.48 points (-1.87%) to 11,984.61, while the S&P 500 dropped 24.91 points (-1.89%) to close at: 1,295.11. Oil ended the day a little lower, at $102.58 a barrel, while Gold ended at $1,411. The VIX rose 1.66 points to close at 21.68.
    I wondered last night what piece of news was lowering market futures. Apparently, it was a wake-up call about U. S treasury bonds issued by Bill Gross, the co-CEO of PIMCO. PIMCO is the 800-pound gorilla in the bond world, with over one trillion dollars under management: A Not-So Subtle Tip: Sell Gov't Bond Funds Now. Mr. Gross presents three pie charts in his latest monthly investment newsletter. The first pie chart shows a breakout of the traditional buyers of U. S. Treasuries... about 40% to U. S. customers, 50% to foreign customers, and 10% to the Federal Reserve. The second chart shows the current buyers of Treasuries... 30% foreign and 70% Federal Reserve. The third chart asks who will buy U. S. Treasuries after June, when the Fed terminates its Quantitative Easing II bond purchases? Mr. Gross' conclusion is that interest rates may have to rise substantially to attract more buyers and fund the deficit once the Fed curtails its bond-buying program. And that could derail the recovery.
    In addition to the threat to the economic recovery, stun bombs and guns were used against Saudi protestors today: Brace for $200 oil if unrest spreads in Saudi Arabia.  
    In The retreat of the bulls , Mark Hulbert notes that investors have become quite a bit more cautious over the past twelve days. 
    Bull market should see third anniversary  
    Technical Talk: The Battle For 1300 Is On
    Market futures are a bit higher tonight.   
      
2011-3-10 (Thursday Afternoon): Richard Meiers at TopStock Portfolios is warning that it's probably too early to short the markets just yet: Mid-Day Market Update: Sell Signals Piling Up, But....

2011-3-10
(Thursday Morning):
 It's possible that this might be the final dip, the "capitulation of the bulls" when everyone sells their best stocks, followed by a rapid climb: Happy Anniversary, but the charts don't look that way. The Underground Trader observes that today is "rollover" day for the S&P e-minis futures contracts.
    In the meantime, oil has slid below $101, and is falling toward $100 a barrel, catching the oil traders by their futures contracts. The price of oil certainly isn't driving the markets lower. There has been some slightly bad news: Recovery fears slam Street, but nothing that wouldn't normally be shrugged off: Quick Comments: A Change In Market Tone?, The Underground Trader: What's going On With Futures?. The Underground Trader suggests that this sell-off might have to do with the announcement by PIMCO's Bill Gross that he has dumped all U. S. Treasury bonds.
    In this kind of random walk, the best move to make is probably none at all... to wait until the dust settles before making a move.


2011-3-9 (Wednesday Night): Stock markets ended the day flat: Dow struggling for gains. The NASDAQ Composite lost 14.05 points (-0.51%) to 2,751.72. The Dow inched down 1.29 points (-0.01%) to 12,213.09, while the S&P 500 slipped 1.8 points (-0.14%) to close at: 1,320.02. Oil ended the day a little lower, at $104.05 a barrel, while Gold ended at $1,430. The VIX rose 0.38 points to close at 20.19.
    It's an interesting fact that the S&P 500 and many lesser stocks have set up wedge or pennant formations that have reached the points at which they break out either above or below their trading ranges: Foreshadowing?, Technical Talk: Important Juncture On The Charts. Tomorrow or Friday could see breakouts of the major trading indices. Market futures are seriously down (½ % or more) tonight, so that breakout may be on the downside. There's probably some piece of big news, but so far, I haven't found it. Perhaps in the morning...
    Market pundits are banging the gloom-and-doom drum on this second anniversary of the current bull market: Investor lessons as bull market turns two, Bull markets and the judgment of history, and Dailey: Bull market ready to retire (video). "The S&P 500 has doubled since it hit its bear-market bottom on March 9, 2009." What they don't bother to mention is that the bear-market bottom in 2009 was the deepest since The Depression... down more 57% from its October, 2007, high, It would have to rise 15% to get back where it was 3½ years ago. Furthermore, the recovery from this Great Recession has required a huge Keynesian stimulus program, and is occurring very slowly. When we start comparing this bull market with other bul markets, we're comparing apples with an orange. But, of course, the markets could see a long, deep correction. And I could be wrong about what's coming next. The QE II program is currently scheduled to phase out in June. But the arguments I'm reading aren't about a double-dip recession, but about the idea that the markets have come so far so fast that they must be running out of steam.
    The stock market will do what it wants to do, and I'll try to respond to it as best I can. But I don't buy the (in my view fallacious) argument that the market should run out of steam because it's come so far so fast.


2011-3-8 (Tuesday Night): Stock markets rose today, though remaining well-embedded in their trading ranges: U.S. stocks surge on bank-dividend hopes. The NASDAQ Composite gained 20.14 points (0.73%) to 2,765.77. The Dow climbed 124.35 points (1.03%) to 12,214.38, while the S&P 500 added 11.69 points (0.89%) to close at: 1,321.82. Oil ended the day basically unchanged, at $104.61 a barrel, while Gold slid to $1,427. The VIX dropped 0.84 points to settle at 19.82.
    This article, News-Driven Markets: Our Favorite Ways To Play, discusses why the markets have been so chaotic over the past eleven trading days, and  lists four strategies for dealing with this. (There have been days when just about every stock I could find has gone down.) It mentions the fact that the markets are being driven by computer-trading programs that, in turn, are driven by the scanning of news headlines. 

    The above chart of the NASDAQ Composite shows how the last eleven trading days look from a longer-term perspective. So far, the markets have trended upward, with two down days followed by two up days, though with dizzying downdrafts every fourth day. A similar pattern in November took a month to regain its original starting level. 
    Stock market futures are neutral tonight.  


2011-3-7 (Monday Night): Stocks closed down for the day, moving close to the bottoms of their trading ranges: A volatile day (video). The NASDAQ Composite was hit the hardest, falling 39.04 points (-1.4%) to 2,745.63. The Dow declined 88.32 points (-0,72%) to 12,169.88, while the S&P 500 subtracted 9.52 points (-0.74%) to close at: 1,3321.15. Oil ended the day at $104.42 a barrel, while Gold slid to $1,433. The VIX tacked on 0.46 points settle at 19.06
    So far at least, the market indices have risen and fallen within a trading range, consistent with a period of consolidation. Will Libya will sooner or later lose its status as the world's focal point? With the market indices dependent upon the vagaries of the news and computer-driven trading systems, The better part of valor may be to wait for this range-bound trading to resolve either up or down. Trading in the midst of this is challenging.
    Bullish on large-cap stocks "Advisers are far more upbeat about the market‘s prospects than they were six months ago." Money
    Rex Nutting has written a surprising (to me) article: America is still No. 1 in manufacturing.
    Stock market futures are up about ⅓ % tonight.

2011-3-7 (Monday Afternoon): As unsettling as is today's market declines, stocks are (so far) trading within their trading ranges as oil backs away from $107 a barrel to $105 a barrel.

2011-3-6
(Sunday Night):
   Oil is at $106 a barrel and climbing tonight, while U. S. stock futures, and Asian markets are down and falling. This price boost is most likely hedge funds and other traders "piling on" in the oils futures market. But the last time the speculators took over, oil went to $147 a barrel before the speculation ran its course. At the same time, this price gouging could elicit dramatic responses from the international community. But right now, the trend for stocks is down.


2011-3-4 (Friday Night):   The stock market continued its decline until half an hour before the end of the trading day. Then it rallied partially, though not enough to finish in the black. The NASDAQ Composite gave back 14.97 points (-0.05%) to 2,784.67. The Dow redacted 88.32 points (-0,72%) to 12,169.88, while the S&P 500 subtracted 9.52 points (-0.74%) to close at: 1,3321.15. Oil ended the day at $104.42 a barrel, while Gold slid to $1,433. The VIX tacked on 0.46 points settle at 19.06
    Topstock Portfolios explains that today's mal de mer was strictly a consequence of oil prices: Friday's Action - All About Crude. All the other news was good: Factory Orders Above Expectations in January, Jobs Report Shows Improvement; Unemployment Rate Falls to 8.9%, Nation's Retailers Report Good Results in February. By Monday, oil will probably have stepped across the $105-a-barrel threshold. (It's at $104.91 tonight.): Cardillo: Oil prices will hit $115 a barrel, soon Since it's probably being driven more by speculation than by tangible supply-and-demand, it's hard to know how high it will rise before it crashes back to its Plimsoll Line. In the meantime, so far at least, market indices have remained within a trading range.
    Personally, I suspect that there will be further stock market shocks emanating from the Middle East and North Africa before the dust settles. Long-term, I wouldn't expect this to affect to global recovery, but short-term, with traders surfing the market's waves, we may see even greater market swings than have manifested themselves so far. Foreign military intervention in Libya would, I should think, send the world's stock markets into a transient tailspin. 
    A lot is being said about the fact that this bull market is approaching its second birthday (next Wednesday), and comparing it to previous cyclical bull markets.  But I try to remind myself that this has not been a typical bear market. It's the first time since at least The Depression that the Federal Reserve has been unable to rekindle the economy by simply adjusting interest rates... the first time that the Fed has lost control. Furthermore, this recovery has been long and slow, nip and tuck. As the chart below shows, this has seen the deepest stock market decline since the Depression. We're at about the same point along our recessionary timeline as the 1973-74 bear market: the Dow is still about 15% below its 2007 peak, so we have some catching-up to do just to get back where we were in 2007. And earnings have been chugging upward in a way that, maybe, wasn't present in the 1973-74 scenario (perhaps because of global markets and overseas profits). Unlike the 1973-74 era, we're experiencing low inflation.
    Mark Hulbert points out that, normally, well before the second anniversary of the bear market bottom, stock market leadership has shifted from secodary stocks to blue chip stocks, but that right now, blue chips still remain relatively undervalued: Hulbert: Look for a change in stock-market leadership   
    A couple of other articles of potential interest are: What's your breaking point as gas prices rise? and With oil, it’s all about supply: Howard Gold.
    Mark Hulbert has also written: Investor reaction times shorter than ever, while Tom Kilgore writes: Prepare for transports weakness to spread.  Myra Saefong comments on $100 oil: Here to stay or soon to go? (This article notes that upheavals in Algeria and/or Iran could send oil prices sharply higher, as could unrest in Saudi Arabia.)


2011-3-3 (Thursday): The markets soared today on marginally lower oil prices and Optimism over jobs report : Dow's best day this year..The NASDAQ Composite climbed 50.67 points (1.84%) to 2,798.74. The Dow gained 191.4 points (1.59%) to 12,358.20, while the S&P 500 rose 22.53 points (1.72%) to close at: 1,330.97. Oil moved to $102.01 a barrel, while Gold slid to $1,419. The VIX slipped 2.10 points to 18.60
    As delightful as it is to enjoy an "up" day, the fact remains that nothing has really changed for the better. The price of oil is lower than it was yesterday, but higher than it was day before , and the situation in Libya is, if anything, worse than it was yesterday. This afternoon, it seems to me that President Obama threw down the gauntlet to Quaddafi: Obama Says Gadhafi Must Go, Sends Transport to Tunisian Border,  Stating Publicly for the First Time that "Gadhafi Must Leave, " President ..., and ratcheted his rhetoric to new levels suggesting imminent action: Obama to Pentagon: Give me a list of options to protect Libyans. If the U. S. and/or other nations get physical with Libya, it would seem to me that this would have a chilling, short-term effect on market indices. 
    In the meantime, the market has been consolidating in a trading range, and was at the top of that range today.  
    I think that caution is still the short-term watchword here.
    Stock market futures are up very slightly tonight, pointing toward a neutral or tepid opening.


2011-3-2 (Wednesday): The markets yo-yoed up and down all day, closing up a few points from where they started.. The NASDAQ Composite climbed 10.66 points (0.39%) to 2,748.07. The Dow gained 8.78 points (0.07%) to 12,066.80, while the S&P 500 rose 2.11 points (0.16%) to close at: 1,308.44. Oil jumped to $102.43 a barrel, while Gold registered another new high at $1,436. The VIX slipped 0.31 points to 20.70
   
The reason for today's market doldrums isn't hard to find: oil closing at $102.43 a barrel. It's not that there's an imminent shortage of oil, or that there will necessarily soon be one. Oil futures are responding to elevated, perceived risk levels. (Today, Qaddafi's forces dropped bombs near Libyan oil facilities.) The U. S. and the U. K. have threatened enforcing a no-fly zone over Libya, keeping Qaddifi's forces from bombing Libyan insurgents. The problem is that the first step in such a program is attacking and destroying Libyan air defenses... an act of war. And as the U. S. has learned to its sorrow, it's a lot easier to start brushfire wars than it is to shut them down.
    Here's an interesting article in The Guardian: Intervention in Libya would poison the Arab revolution. Here's an excerpt from another article: Libya, Could Military Intervention Backfire?
    "Hamid said he worries that the U.S. might be so haunted by the mistakes it made in Iraq that it would fail to take action in what is a truly humanitarian crisis in Libya. 'Unfortunately, we have a president in the U.S.,' he said, 'and I think this goes for many Western leaders, who are defined by their caution. They are afraid of making the wrong moves, so they don’t make any moves at all. And when they do, it’s quite late in the game.;
    "That is not to say that imposing a no-fly zone in Libya would be risk-free for the U.S. and NATO allies. 'It could cause problems,' Hamid said. 'It could provoke a response that we’re not expecting. But we have to choose between policy alternatives, none of which are ideal, and you try to weigh the costs.'”
    "Some officials say the entire debate may be mute. NATO has said that any intervention would have to be sanctioned by the U.N. China and Russia, both of whom hold permanent seats on the Security Council and enjoy veto power, indicated this week that they would prefer to see the matter resolved diplomatically."

    We seem to be repeating the 2008 run-up in oil prices to $147 a barrel brought on by speculation in oil futures.

    This is a news-driven stock market and as such, is unusually unpredictable. So what should we do now? I can only tell you what I'm doing now. Two of my rules are: (1) "Sell early or not at all." (taken from TopStock Portfolios: Panic Early Or Not At All), and (2) don't buy in a falling market. Wait for the market to bottom, and then to move one-third to one-half of the way back up. In keeping with the first rule, I sold a couple of stocks today at a profit. I don't know whether the stock market is going to go down or up from here, but at the moment, I want to be in lower-risk, lower-leverage investments until the vagaries of this Middle-Eastern situation no longer wag the market.
    In the meantime, the long-term outlook still seems to me to be unchanged. If the earnings on the S&P 500 hit $107 a share by the end of 2012... and I'm reading that they're more apt to come in higher than lower... its P/E ratio, if it closed around 1310 as it did tonight, would be about 12.2. That's not a terribly low reading, but it's well below the 20:1-to-22:1 ratios that commonly  characterize bull market peaks. Of course, we don't have to have an apogee in December, 2012, but it seems to me that it would take a glum outlook at that time to inspire a P/E ratio of 12.2-to-1.. 
    David Moenning with TopStock Portfolios has penned this article tonight, Is That All There Is?, suggesting that we may be at or near the top of this cyclical bull market  He mentions that we've risen 98.5% from the March, 2009, low to the present time. But the market indices had dropped about 55% from their October, 2007, high to their March, 2009, low. Further, there will be an additional five years of rapid earnings growth between October, 2007, and December, 2012. Barring the unexpected, I would expect to see the S&P 500 close quite a bit higher than its October 8th, 2008, close at 1,562. (As I recall, the stock market wasn't overpriced in October, 2007. I believe it was the sub-prime meltdown that brought down the market.) I'm extrapolating to 2,100 to 2,300 on December 31, 2012 (20-to-22 times $107).
    Of course, anything can happen. There could be a double-dip recession. Another Wall Street bubble could burst. Geopolitical upheaval could torpedo the global recovery. There are no certainties, and nimble flexibility is, I think, a prudent modus operandi.
    Also, although a much higher market might be the endpoint, there can be much lower market indices between here and there. The stock market correction that began in June 1983, and lasted until  September, 1984, saw a drop of something like 20% on the Dow at its nadir.
    To sum up, I think it makes sense to be in a sell-or-hold mode tonight, until the stock market declares its intentions.
    The Daily Decision Stock Trade took a couple of hits during the current market reversal. One of its stocks was down nearly 10% and another was down nearly 5%. A third stock (Yahoo) generated a 3½ % loss. On the other hand, the strategy made enough on three other trades to nearly offset its losses. And with luck, its current open position may do the rest of the job. And let's face it, the last seven trading days have been brutal. 
    I continue to be very impressed with Mr. Meiers' acumen.
    Market futures are up about ⅓ % tonight.


2011-3-1 (Tuesday): The markets fell from the sky today. The NASDAQ Composite fell  44.86 points (-1.61%) to 2,737.41. The Dow dropped 168.32 points (-1.38%) to 12,058.02, while the S&P 500 sank 20.89 points (-1.57%) to close at: 1,306.33. Oil is at $100.28 a barrel, while Gold registered a new high at $1,434. The VIX ended the day up 2.66 points to 21.01
    Presumably, the markets nose-dived today because of Mideast tensions, and because the price of oil rose again, broachng the $100-a-barrel membrane: Oil back above $100. The USS Ponce and the USS Kearsage, with 400 (1200?) marines aboard, are churning their way through the Suez canal on its way to "the shores of Tripoli". The aircraft carrier, USS Enterprise, is on alert and is moving toward the Suez Canal, although it doesn't yet have orders to exit the Red Sea. (There might possibly be British forces also on their way to Tunisia.)  
 
   Most world markets have also dropped in response to the escalation in crude oil prices: Hong Kong takes crude hit, Japan stocks slapped, and Australian shares sag. If the indices are currently news-driven, it's hard to know what will come next. Intuitively, I would expect a morning bounce, followed by further declines, but if it depends upon knowing tomorrow's news, all bets are off.
    Stock market futures are falling tonight, which isn't supportive of a morning bounce. 
    My personal suspicion is that Qaddafi won't be allowed to hold the world for ransom very long, but
we'll see. 


2011-2-28 (Monday): After rising falling and then rising again into the close, the market indices all closed up on the day: Another bull month. The NASDAQ Composite rose only 1.22 points (0.04%) to 2,782.27. The Dow gained 95.89 points (0.79%) to 12,226.34, while the S&P 500 climbed 7.34 points (0.56%) to close at: 1,327.22. Oil fell to $98.46 a barrel, while Gold ended at $1,398. The VIX dropped 0.87 points to 18.35.
    Peter Brimelow has an article tonight entitled Modern Portfolio Theory redux?   about Lewis Navellier's Emerging Growth portfolio.
    Let's see what we might expect out of the current cyclical bull market by the end of 2012. (This assumes that it behaves like prior, classical cyclical bull markets.) "Classical" bull markets usually end when the price-to-earnings (P/E) ratio on the S&P 500 reaches 20-to-22, usually at a time of great exuberance, amid claims that "this time, it's different, because... " Everybody has heard about the great gains being made in the stock market, and everyone is talking investments, and giving and receiving investment advice. A current estimate for the 2012 earnings on the S&P 500 is of the order of $106 a share. At tonight's close of 1,327, $106 earnings would work out to a P/E ratio of $1,327/$106 = 12.5. Alternatively, at a P/E ratio of 20:1 at the end of 2012, that would correspond to an S&P level of about 2,120. If the P/E ratio reached 22"1, the corresponding S&P level would be about 2,335.
    The crux of this is that if this recovery parallels prior recoveries... and it may not, since the circumstances surrounding The Great Recession have been uncommon... the markets may have a lot farther to go than simply recovering their October, 2007, peaks.
    For what little it means (and it may mean very little considering how drastically market futures can change overnight), the markets are up a couple of tenths of a percent tonight.


2011-2-27 (Sunday): Stock market futures are down tonight, but are rising. 
    Market internal conditions are pointing up.
    Herd mentality steering stock-fund investors
    4 big threats to the economy  


2011-2-25 (Friday): Stocks followed through, continuing to rise after yesterday's reversal.  The NASDAQ Composite rose 43.15 points (1.58%) to 2,781.05. The Dow rose 61.95 points (0.51%) to 12,130.45, while the S&P 500 climbed 13.78 points (1.06%) to close at: 1,319.88. Oil fell to $98.46 a barrel, while Gold ended at $1,398. The VIX dropped 2.1 points to 19.22.
  
  The S&P 500 ascended to 1,320 but was unable to broach this resistance level. Two opposing influences on today's ups and downs, would have been the covering of shorts after yesterday's sharp reversal, and the urge to sell stocks to avoid weekend surprises. In contrast to yesterday, when the last minute of trading saw a 7,000,000-share purchase, today's last two minutes saw two 9,000,000-share sales.
    I suspect that we're in for a period of range-bound consolidation, including a retest of yesterday's low. But I could certainly be wrong.
    Rex Nutting advises us that Oil prices will slow but not halt growth.  
    Oil, Mideast still stump U.S. 30 years later  


2011-2-24 (Thursday): I said last night that "I believe that tomorrow will bring a further decline in the market indices before they turn around." That part was right, but the extreme bounce off a low that had penetrated support levels by half a percent caught me by surprise. Apparently, the dramatic turnaround in the markets has been the response to a Twittered rumor that Gadhafi has been shot. Still, the robustness of this upthrust suggests to me that tomorrow may not see further declines. But this marketplace is so deceptive that it's dangerous to jump to any conclusions.
A Few Minutes Later: There was heavy selling into the close, followed by stabilization and a huge buy (~7,000,000 shares) as the last trade of the day: Street chips away at losses.
    The markets closed mixed. The NASDAQ Composite rose
33.43 points (0.55%) to 2,737.80. The Dow slipped another 37.28 points (-0.31%) to 12,068.50, while the S&P 500 gave up 1.30 more points (-0.1%) to close at: 1,306.10. Oil fell to $98.46 a barrel, while Gold ended at $1,398. The VIX dropped 0.95 points to 21.19.
    The sellers haven't all disappeared. At the same time, at some point, there could be a frantic scramble to get back into the stock market: Stocks- Bull market has room to grow. Whether or not that happens tomorrow remains to be seen. However, the markets will presumably retest their lows. (I think it's important to know that the indices will probably retest their lows before they resume their upward trend.)
    Gaddafi facing final stand in Tripoli   
    Does More Oil Make The Problems Go Away? This article explains that oil supply anxieties were driving up the price of oil, threatening to strangle the recovery. Reassuring promises had to be made to calm the markets. In this case, they were made by the Saudis, who announced today that they're ready, willing, and able to make up the modest shortfall that even complete disruption of Libyan oil  supplies would visit upon the world's oil markets. The International Energy Agency announced today that the Libyan turmoil has reduced world oil supplies by less than 1%: IEA: Up to 750K barrels of oil a day off market.
     Stock market futures are up about 0.3% tonight, and are rising.


2011-2-23 (Wednesday): Today was another down day, though not as bad as yesterday. But there was heavy selling and falling prices heading into the close... not a good sign. My guess would be that it will take at least weeks to undo the technical damage that has been sustained by the indices.
    The NASDAQ Composite fell a further
33.43 points (-1.21%) to 2,722.99. The Dow dropped another 106.86 points (-0.87%) to 12,105.93, while the S&P 500 declined 8.03 more points (-0.61%) to close at: 1,307.41. Oil ladvanced to $98.46 a barrel, after briefly exceeding $100 a barrel , while Gold ended at $1,411. The VIX increased an additional 1.09 points to 21.89.
    The markets closed trending downward. I believe that tomorrow will bring a further decline in the market indices before they turn around. Also, many investors think that this contretemps may be a two- or three-day decline that will quickly pop back to the trend line. From a contrarian point of view, that suggests that won't happen until most seasoned investors become sufficiently discouraged that they throw in the towel. Tomorrow could see a false bottom, followed by a further decline on Friday. But we'll only know after it becomes past history.: Saudi stocks show clues
    To the extent to which the market's decline is news-driven, the market could respond favorably to the overthrow of Muammar Gaddafi. Given the lack of support Gaddafi has abroad, this could come sooner rather than later: Gadhafi clings to power as territory slips away. (It's pretty evident that Gaddafi's days are numbered.) But the end of Gaddafi will only shift attention to other Mid-Eastern nations mounting their own struggles for representative government..
    Mark Hulbert draws ominous parallels between the stock market plunge last April and the potential for a similar plunge right now: That was then. Now is now.
    Gas prices head for 'disaster' (video).
    Paul Farrell writes: Market Crash 2011: It will hit by Christmas.  
    TopStock Portfolios has this article on their website: Deja vu All Over Again? Or....Another article says, Bullish Sentiment Continues To Rise. And yet another article is noteworthy: How Long Can the Bulls Keep On Keepin' On?
    Stock market futures are up slightly tonight, a little less than they were last night.

2011-2-23 (Wednesday Afternoon): Todd Harrison has said that the markets are designed to deliver the maximum level of pain and frustration. I think that we're seeing classical bear market performance. At the same time, the U. S. stock market is about the only game in town. Gold is at the top of its range, so it's a little risky to buy gold. Oil is also up: Oil crosses the $100 level, U.S. Oil Fund breaks out, making it a bit risky, too: Oil at $220? Maybe. Bond yields are down, and bond prices are up for the moment, with fear outweighing greed, so now would be a good time to sell bonds and buy stocks. But emerging market stocks are falling, so the U. S. becomes one of the havens of choice for global investment capital. 
    Why is there so much thunder and lightning over what happens in Libya? My guess is that it's because the West (with the United States front and center) has propped up evil dictatorships in order to ensure continued delivery of third-world oil. And the money for this hasn't gone to the legitimate owners of the oil: the citizens of third-world countries. Instead, it has been funneled into the pockets of wealthy and politically connected elites within those countries. (A classic example is the extraction of Bolivia's tin at the hands of a single wealthy Bolivian family that, decades ago, escaped to Switzerland to enjoy their $500,000,000 in "tin money".) Now, there's the risk of the entire Mideast exploding in rebellion against their lords and masters, with, perhaps, not the warmest feelings toward their Western neighbors.
    There are enormous amounts of cash sitting on the sidelines waiting for a chance to get into the U. S. stock market. It must be taking a lot to keep them from rushing in. At the same time, market meltdowns like this don't generally end until the bulls abjectly and despondently capitulate. This entails various "bear trap" rallies that trap buyers banking on a turnaround, and extract their money from them.
    The thing to do now is to hold on. After the markets turn around and retrace their declines by at least 50%... and they will..., it will be time to load up on stocks at bargain-basement price levels.
    Of course, you can always stock up now. The worst danger is that you may not get the lowest available prices.

2011-2-23
(Wednesday Noon):
The markets have broken through major resistance levels and are in free fall. The long-awaited correction has begun. What to do about it? The advice here is "sell early" (which I haven't) "or not at all".
    This may go on longer and dig deeper than most of us (including me) expect.


2011-2-22 (Monday): The markets crashed today. The NASDAQ Composite plunged 77.53 points (-2.74%) to 2,756.42. The Dow plummeted 178.46 points (-1.44%) to 12,212.79, while the S&P 500 lapsed 27.57 points (-2.05%) to close at: 1,315.44. Oil leaped to $95.94 a barrel , while Gold ended at $1,401. The VIX jumped a full 4.37 points to 20.80.
  
 The official reason given for today's debacle is that of the Libyan political crisis. However, the markets have become more and more overdue for correction. What's important now is what happens from here. Market futures are up about 0.2% tonight... enough to support a "dead cat bounce" tomorrow morning, followed by further price erosion. In all likelihood, this is a 3% to 5% pullback, but it has to be enough to scare very smart and savvy professional investors into dumping the premium-grade stocks they've just bought. (Today, the NASDAQ fell 2¾ % while the S&P is down about  1¼ %. Right now, the best thing I know to do is to do nothing. When the markets finish bottoming, and have convincingly started back up, that will be the time to start bargain-hunting.


2011-2-18 (Friday): The markets did their daily dance. They soared, swooped, and then rose at the close: Stocks gain for third week. The NASDAQ Composite rose 2.37 points (0.76%76%08%) to 2,833.95. The Dow advanced 73.11 points (0.99%) to 12,391.25, while the S&P 500 rose 2.58 points (0.19%) to close at: 1,343.01. Oil closed up at $86.47 a barrel , while Gold ended at $1,384. The VIX dropped 0.13 points to 16.59.
  
  This market just keeps going and going and going, like the Eveready bunny: Disbelief. But although a temporary  turndown could happen at any time, right now, it's like a moving train, and it doesn't pay to get in front of it, or bet against it: "Buy everything" sentiment continues on Wall Street.
    There's very little other news or discussion available to me tonight. Wall Street is getting its first three-day vacation in months that can be used for something other than Thanksgiving, Christmas, or New Years obligations.
    I've added a little to last night's discussion of TopStock Portfolios' Daily Decision Stock Trade service at the bottom of yesterday's article (below). I'll try to find time to discuss ways to "surf" this ongoing recovery other than TopStock Portfolios' Stock Trade Service.. 


2011-2-17 (Thursday): The markets did their daily dip dance. falling in the morning and then rising to new heights at the close. The NASDAQ Composite rose 6.02 points (0.76%21%) to 2,831.58. The Dow advanced 29.97 points (0.24%) to 12,288.17, while the S&P 500 added 4.11 points (0.63%31%) to close at: 1,340.43. Oil closed up at $86.47 a barrel , while Gold ended at $1,384. The VIX dropped 0.13 points to 16.59.

Back to the Daily Decision Stock Trader: Retirement Accounts
 
   To repeat and expand upon Tuesday's last paragraph: (see below)
    "How fast will it grow? The Daily Stock Trader shows a gain as of today's close of 27.7% in two months, from the inception of the service on December 10, 2010, through February 11, 2011 (last Friday). At that rate, our investment pool would double every six months.
    My calculations, based upon treating all the gains and losses as sequential, would lead to a doubling every two months."
    The difference between my two-month doubling time and Mr. Meiers' six-month doubling time (my interpretation of his 27.7% in two months) might be, I think, a consequence of the fact that his 27.7% return may be based upon the total size of his portfolio whereas I'm assuming that every dime of my investment capital is invested at all times. I mentioned earlier that there might be a way to manage an investment pool such that all of it is fully invested at all times, except for those uncommon days when Mr. Meiers is completely in cash. The scheme I had in mind doesn't look too bad. It would work like this.
    Suppose that on Monday, Mr. Meiers specifies a "first investment". We'd invest all of our capital (which we'll suppose to be $50,000) in that first investment. Let's suppose that this stock is priced at $50, so we'd be able to buy 1,000 shares of it with our $50,000. And let's suppose that we're using Interactive Brokers as for our brokerage service. Their commission on this 1,000-share purchase would be $5.00 (half a cent a share). 
    On Tuesday morning, Mr. Meiers recommends a second stock  We would sell half of our first investment... 500 shares (which we'd have to do sooner or later, anyway)... and invest the resulting ~$25,000 in the second stock. We'd pay a $2.50 commission to sell 500 shares of the first stock. To keep things simple, we'll suppose that the second stock also costs $50, so we'll be buying 500 shares of it for an additional $2.50 in commissions. So our total commission cost on the second day is also $5.00.
    On Wednesday morning, Mr. Meiers provides a third stock selection. We would sell 167 shares of each of our first two stocks and buy 334 shares of the third stock. Our total commission cost on Wednesday would be $3.34. 
    On Thursday morning, Mr. Meiers endorses a fourth stock. We'd sell 83 shares of our Monday and Tuesday stocks and 84 shares of our Wednesday stock to buy 250 shares of Thursday's stock. Our total commission on Thursday would be $2.50.
    Now suppose that on Friday, Mr.Meiers recommends selling all four stocks... 1,000 shares of stock in all. Our total commission expense on Friday would be $5.00. So our total commission cost for the week would be $20.83.
    How would this compare with the profits we might expect for the week? Using Mr. Meiers' conservative value of 27.7% for 44 days of trading (after subtracting Christmas and New Year's days), we arrive at a an average daily return on investment of about 0.63% a day. 63% of $50,000 is $315 a day, or $1,575 a week, so an overhead cost of $20.83 a week would be a very small fraction of our expected weekly gains.
    A worst-case scenario might be that all the recommended stocks cost $10 a share, quintupling the trading costs to $104.15.  The average price for Mr. Meiers' stock picks is about $37, so the weekly tab with a $50,000 account in the scenario I'm describing would be about $28 a week. This would be a very small tax on the $1,500 or so that we'd expect this service to earn. 
    Suppose we used a "retail" trading service that charges $8 ($7.95) for trading any number of stocks. Then we'd have one trade on Monday, two trades on Tuesday, three trades on Wednesday, four trades on Thursday, and four trades on Friday, for a weekly total of 14 trades at $8 a trade, or a weekly total of $112.... exactly four times the cost at Interactive Brokers.
    From this, I conclude that the crossover point at which conventional online brokerage services would become cheaper than Interactive Brokers services would be when the amount to be invested exceeds about $200,000.
    If TopStock Portfolios' Daily Decision Stock Trade service works as well I'm hoping it will, our accounts might exceed $200,000 sooner, rather than later.
The Bottom Line: TopStock Portfolios' Daily Decision Stock trade service should quadruple your money every year, thousand-folding it in five years.
    It's my hope that the modified funding arrangement I'm describing here might cut the doubling time to four, three, or even two months, 8-folding, 16-folding, or even 64-folding our annual gains, reducing the 1,000-folding times to 3, 2½, or even 1⅔ years. 

Taxable Investment Accounts
    If the money we plan to invest is taxable money, we can deposit it in a margin account and approximately double our rate of return, halving the doubling times and the 1,000-folding times. This means that if Mr. Meiers had used maximum margin, his portfolio would have doubled in three months instead of six months, generating a 16-fold rate of rise each year, and 1,000-folding every 2½ years, Of course, taxable accounts are taxable. It might be feasible to pay the Internal Revenue Service interest on the outstanding tax bill until the end of the year, giving the money more time to compound, but in the end, ⅓rd of all your gains would go to the U. S. government.
    Wouldn't it be dangerous to invest using margin? Not if you're satisfied that your stock selections will, on average, rise.

    If my adjustments to Mr. Meiers' basic strategy* work in practice the way they do on paper, the 1,000-folding times, using 100% margin, may be
1⅔ years (20 months), 1¼ years (15 months), or 5/6ths years (10 months).
* - "my adjustments" refers to selling portions of existing stock positions to raise cash to add new stock positions, as directed by TopStock Portfolios Daily Decision Stock Trade service.
    Is this for real? Or is this just a crazy fantasy?
    I've been using the Daily Decision Stock Trade for a few weeks now, and so far, it seems to work as advertised. My biggest problem has resided in the fact that I've been reluctant to trust this system, and have tried to second-guess it. But I'm sold now on following the rules.
    One of the great things about this is that, since it multiplies your money so rapidly,  you can start without risking much money. Or you could run paper trades for a few weeks to check it out. 

Using Call Options to Generate Leverage in Retirement Accounts
    If we're only going to be holding a stock for a few days, then we could generate immense leverage by buying short-expiration, near-the-money call options rather than spending the money on the stocks themselves. And we're allowed to buy and sell calls and puts in retirement accounts. To illustrate the effectiveness of this approach, I bought 70 March 19 calls on the stock that Mr. Miers recommended yesterday (Wednesday, February 16th) for $149 a call, for a total investment of $10,497.47, including the trading commission. At tonight's close those 70 options are worth $12,670, for a two-day gain of about $2,170, or about 20% of my original $10,497.47. But there are problems with this approach. Most of the stocks that the Daily Decision Stock Trader selects aren't for all practical purposes "optionable". Most of them are too thinly traded for even our meager investments. For example, today's stock-of-the-day saw a grand total of 36 calls traded in the most popular March Call option, for a total trading dollar volume of about $4,800.with a total ownership of that call of about $55,000. The only other active March call involved about $1,500 worth of trades. And because of the thin trading in options on this stock, the spread between what you have to pay to buy the option and what you'll be paid when you want to sell the option on the most popular call on today's stock is 20¢ a share. That amounts to about 13% of the $1.33 price of the call. Considering the fact that the 70 calls that I used to generate my $2,170 in profits only had a spread of 32¢, 20¢ a share is pretty steep. Twenty cents a share is how much the price of the call option has to rise before you reach the break-even point.
    There's another problem with using calls having to do with trading volume. Investing $100,000 in $100 calls would require buying and selling 1,000 calls. Investing $100,000 in $200 calls would require the purchase of 500 calls. For all but the most heavily traded stocks, that's a significant fraction of the total daily volume in a given put or call option. If more than a few people tried to trade the same call option at the 500-to-1,000-contract level at the same time, I suspect that for most stocks, the system wouldn't be able to handle the load. So that's a major limitation with options.
    Beyond that, trading options is a bit tricky. And of course, the use of options will hugely amplify your losses as well as your gains. But for better or for worse, they can put the Daily Decision Stock Trade on steroids.
To sum it up: Following the Daily Decision Stock Trade program meticulously should quadruple our money annually.
    Using my scheme of remaining fully invested, we might 8-fold-to-16-fold our money in a year.
    In a margin account (minimum balance: $25,000), the Daily Decision Stock Trade service should 16-fold our money annually before paying income taxes, and should 11-fold our money annually after we pay income tax on our gains.
    Using my scheme of remaining fully invested, we might 32-fold to 64-fold our money before taxes in a year, and might 22-fold to 42-fold our money after paying income tax on our earnings. Thousand-folding in two years looks possible.
    
    Of course, the proof of this pudding will come in the eating, and that will take additional time. But this is how it looks to me on paper.
    At the very least, it looks to me like a worthy investment gambit.


2011-2-16 (Wednesday): The markets rose to new highs today. The NASDAQ Composite rose 21.21 points (0.76%76%) to 2,825.56. The Dow advanced 61.53 points (0.5%) to 12,288.17, while the S&P 500 added 8.31 points (0.63%63%) to close at: 1,336.32. Oil closed at $85.08 a barrel , while Gold ended at $1,379. The VIX changed points to 16.72.
    Market futures are slightly negative tonight.
    Iran war ships drive safe-haven buyers to gold  


2011-2-15 (Tuesday): First, a few words about the stock market. 
    There seems to be general agreement that it's overbought, and that investor sentiment is quite complacent: Mark Hulbert- Sentiment is high — maybe too high, Fund firms are full of bulls. On the other hand, it's been this way for quite q while. There's a great deal of money pressing to get in the gates.
    On the third hand, the markets are a hair-trigger away from a sell signal.
    The markets are down today on disappointing economic reports: Stocks slip. Disappointing retail sales were a part of this picture: Stocks stumble after weak retail sales. Two of the more-subtle reasons that the markets might be depressed today could be the fact that the New York Stock Exchange has been purchased by the German stock exchange, and government-backed mortgages will become a thing of the past, leaving the field open to the private sector. This, says Marketwatch's David Weidner, underscores the way the U. S. is falling behind the rest of the world: Loss for Street prestige. Too much U. S. government? Are we too socialistic? The countries that are eating our lunches are the Chinese Communists and the European socialistic nanny states.
    Nasdaq nears big test: Michael Ashbaugh.
    Stock market futures are up and are rising tonight.  
          
    Returning to the subject of TopStock Portfolios' Daily Decision Stock Trade, One of the benefits of this or any other successful stock trading service is that (1) using this service, we can prosper in falling markets as well as rising markets, (2) we can dispense with all other financial services, and (3) we can spend our time in other ways than following the stock markets. Of course, this requires a little more effort than owning a mutual fund. We have to check our email each morning for the morning stock message and then act on it immediately by buying shares of the stock that Mr. Meiers recommends. We also have to check our email during the day in case Mr. Meiers sends a "sell" signal.
    So how much money can we make? Or more accurately, how rapidly can we grow our money?
    That depends upon whether we're using a retirement account or an ordinary (taxable) account.
Retirement Accounts
    If we're using a retirement account, we're not allowed to trade on margin. We're limited to direct investments in stock. What happens then depends upon how well we can reallocate our money to maximize the fraction of our available monies that is invested at any given time. For example, yesterday, Mr. Meiers had four stock choices in his portfolio. This morning, he sold two of them, leaving two stock investments for the rest of today. My planned treatment of this would be to reinvest the proceeds from the sale of the two stocks sold this morning in the two remaining stocks. But this raises two problems.
    The first problem is that of sales commissions. At leading popular retail brokerage firms such as Vanguard, Scottrade, eTrade, and the Fidelity Group, the trading fee is of the order of $8 a trade for any number of stocks... $8 to buy and $8 to sell, or $16 for a "round trip" buy-and-sell. If you average one of these "round trips" every trading day, your sales fees add up to $80 a week or $4,000 a year. So the first $4,000 a year that we earn on our money is going to go to pay for the investment commissions. In addition, we'll have to pony up the $795 a year that Mr. Meiers' investment service costs. (It's $395 "for a limited time", but the regular price is $795 a year.) That's about $4,800 a year in upfront  costs... pretty steep. By comparison, most mutual funds charge 1½ % a year for "management fees", or $1,500 a year for $100,000 worth of mutual funds.
    Second, the popular retail brokerage firms such as Vanguard, Scottrade, eTrade, and the Fidelity Group impose an Federal Reserve three-day rule that says that, unless we're using a margin account (which is prohibited for retirement accounts), after we sell something, we can't have our money for three business days until the sale settles. (In practice, this means four business days because the day of the sale doesn't count. If we sell a stock on Monday, we won't be able to use the money until Friday.) The Fidelity Group gets around that limitation by allowing their customers use their proceeds from the preceding sale to buy equities again immediately (on "good faith") with the proviso that they can't sell their follow-on purchases until the money from the first sale is released (four trading days after it's sold). The problem is that Mr. Meiers might recommend that we sell the follow-on position before the four days are up.
    Is there a way around these problems?
    The answer is "yes". There's a brokerage firm called "Interactive Brokers" that (1) charges 1¢ a share for a buy-and-sell stock trade. For 100 shares of stock traded once a day, this amounts to $1 a day versus the Fidelity Group's $16 a day. But there's a crossover here. If we're trading more than 1,600 shares of stock, Fidelity, with its flat $8 a trade rate becomes cheaper than Interactive Brokers. And if we're investing, say, $50,000 in a retirement account, Fidelity may be the cheaper way to go.... which brings us to the three-day rule.
    Interactive Brokers has a way of evading the three-day rule for retirement accounts by setting up a limited type of margin account for retirement funds. This limited margin account won't allow us to buy any more stock on margin but it will get us around the three-day rule. We can buy and sell merrily. There's one hitch. The minimum funding level (at all times) for any margin account is $25,000. So it takes $25,000 to open a margin account at Interactive Brokers, and the instantaneous total value of the assets in the margin account must never go below $25,000.
    The full $25,000+ in the account doesn't have to be used for trading. We can use $1,000 of it for investment purposes, and keep the remaining $24,000 earning interest in Interactive Brokers' money market fund. Because of the fact that money should grow relatively rapidly in the Daily Decision Stock Trade service, we ought to be able to afford to start relatively small and grow our money. 

    How fast will it grow? The Daily Stock Trader shows a gain as of today's close of 27.7% in two months, from the inception of the service on December 10, 2010, through February 11, 2011 (last Friday). At that rate, our investment pool would double every six months.
    My calculations, based upon treating all the gains and losses as sequential, would lead to a doubling every two months.  

To be continued.


2011-2-14 (Monday): The NASDAQ and the S&P 500 indices sauntered a little higher today, while the Dow dropped 5 points.  The NASDAQ Composite advanced 7.74 points (0.28%) to 2,817.18. The Dow slipped 5.07 points (-0.04%) to 12,268.19, while the S&P 500 crept up 3.17 points (0.24%) to close at: 1,332.32. Oil closed at $85.12 a barrel , while Gold ended at $1,365. The VIX declined to 15.95.
    It's my bedtime, and Amber just went to sleep. I'll have to try to continue this update in the morning.
    Stock market futures are flat tonight.  


2011-2-11 (Friday): Once again, the markets fell at the opening and then rose to hit yet new two-year highs on word that Hosni Mubarak had resigned his office.  The NASDAQ Composite jumped 18.99 points (0.68%) to 2,809.44. The Dow slipped 43.97 points (0.36%) to 12,273.26, while the S&P 500 crept up 7.28 points (0.55%) to close at: 1,329.15. Oil closed at $85.28 a barrel , while Gold ended at $1,357. The VIX declined 0.4  to 15.69.
    In The best laid plans often go awry, Mark Hulbert concludes that you can't count over the long haul on any investment advisor or on any investment strategy to strongly outpace the market indices. They just don't exist.
    Howard Gold quotes Laszlo Birinyi and others who are arguing that this bulll market still has a sizable way to run... that this is a true secular bull market that could persist into 2013 and not just a cyclical bull market: Is it time to call this a bona fide bull market-. (Maybe I should mention that true secular bull markets and true secular bear markets last something like 16 years apiece, and that in my book, a bull market that endured five or sic years, like the bull market that ran from 1974 into 1981, would still be a cyclical bull market within a secular bear market.)


2011-2-10 (Thursday): The markets dipped deeply today and then ended mixed again, except that this time, it was the Dow that was down (10 points) and the NASDAQ and S&P 500 that were up slightly: Markets look past Mubarak. The NASDAQ Composite rose 1.38 points (0.05%) to 2,790.45. The Dow slipped 10.60 points (-0.09%) to 12,229.29, while the S&P 500 crept up 0.99 points (0.07%) to close at: 1,321.87. Oil closed at $87.55 a barrel , while Gold ended at $1,365. The VIX rose 0.22  to 16.09.
    Stock market futures are down tonight, as has been the case the past couple of nights.  
    Peter Brimelow warns: End coming to era of low interest rates?.  
    Eleven signs the bull market is here to stay  
    I'm looking forward t writing more about investment options, but it's time to read bedtime stories (the Berenstain Bears) to Amber.  


2011-2-9 (Wednesday): The markets ended the day mixed, with the Dow up a few points, and the NASDAQ and S&P down 0.29% and 0.28%.     The NASDAQ Composite closed down 7.98 points (-0.29%) to 2,789.07. The Dow ended up a dainty 6.74 points (0.06%) to hit a new high, at 12,239.89, while the S&P 500 wilted 5.52 points (-0.28%) to close at: 1,320.88. Oil closed at $86.83 a barrel , while Gold ended at $1,362. The VIX rose 0.06  to 15.87.
    Stock market futures are mixed and volatile tonight. If the indices fall, it will be an excellent time to buy.  
    Although the market indices largely shrugged off today's midday losses, most of the smaller stocks that I was tracking did not. They're still cheap and represent good bargains.  


2011-2-8 (Tuesday) The markets have closed up for the seventh day in a row. The NASDAQ Composite added another 13.06 points (0.47%) to 2,797.85. The Dow gained 71.52 points (0.59%) to end at 12,233.15, while the S&P 500 advanced 5.52 points (0.42%) to close at: 1,324.57. Oil closed down a little more at $87.43 a barrel , while Gold ended at $1,363. The VIX rose 0.47  to 15.81.
  
  Stock market futures are down a bit tonight. If we do get a market pullback, it might afford a timely opportunity to invest in a 2X mid-cap index ETF like MVV: Midcap stocks rally above 2007 high. TopStock Portfolios' David Manning is summing up the current market situation this way: The Trade - 2011. The bulls are stampeding, and there don't appear to be obvious obstacles to this mass movement over the next few weeks: S&P 500 breaks from major resistance.


2011-2-7 (Monday) TThe markets have defied gravity again today.  The NASDAQ Composite added another 14.69 points (0.53%) to 2,783.99. The Dow gained 69.48 points (0.57%) to end at 12,161.63, while the S&P 500 advanced 8.18 points (0.62%) to close at: 1,319.05. Oil closed down a little more at $87.58 a barrel , while Gold ended at $1,350. The VIX rose 0.35  to 16.28.
    So why are stocks still rising when pundits are calling for a correction? Maybe it's because there's a lot of money coming out of the bond market into the stock market. Or maybe it's because all the pundits are calling for a pullback. Or maybe it's because people who have been afraid to invest are jumping back in. When a correction finally arrives, it will do so in a manner that will trap recent arrivals to the equity markets and strip them of their money. In the meantime, there doesn't seem to be much commentary on the market's relentless rise.
    Stock market futures are a tad positive tonight.
    My projection for Richard Meiers' stock trading program, based upon his reported gain of 24.66% for the 1¾ months he's been in operation, would be a quadrupling or better in a year's time. My interest in leveraging my money using call options has been inspired by the fact that I'm investing money in a Roth IRA. IRA's can't use margin to boost their gains. But for a taxable account, margins work fine any time we're facing a situation in which we can be pretty sure that our gains will comfortably outweigh our losses.. In that case, by investing with 100% margin, we could square our gains, and 16-fold our (taxable) money in a year. Of course, we'll have to pay income tax on our earnings, and we can't expect capital gains treatment since the holding periods for these stocks would be very brief.
    I'll try to discuss this tomorrow if time permits.  


2011-2-5 (Saturday) To continue with last night's story, I should probably confess that not only was it foolish of me to repurchase on Thursday at a higher price calls on the stock that Mr. Meiers had featured on Wednesday morning, after I had sold them at a profit on Thursday... it was also foolish of me to have bought the 20 calls on Wednesday morning in the first place rather than just one call. I'm not yet certain how well Mr. Meiers' stock trading service is going to work over the long haul, and I'm raising the risk level by immediately switching from buying the stock itself to buying calls on the stock. It won't hurt to spend a week buying and selling just one call on the stocks that he is endorsing before graduating to two calls and then three and then four, and so forth. I let my greed trump my fear. And to be successful as an investor, one must be dispassionate and rule-based about what one does.
    Second, starting on Monday, I'll begin purchasing March 19 calls rather than February 19 calls. The reason is that (a)  February calls will turn back into pumpkins on February 20th, and (b) as we get closer to February 19th (which is a week from Friday), the prices of the options will fall as their risk premiums shrink to zero. To illustrate this point, at the time that I sold my $31 calls, the price of the stock was $32.25. That means that the intrinsic value of each call was 100 X ($32.25 - $31) = 100 X $1.25 = $125. The value of my call at that time was $151, of which $125 was intrinsic value and $26 ($151 - $125) was the time-decaying risk premium value of the call. By a week from Friday (the February 19 options expiration date), the value of that call if the stock were at the same $32.25 price it was at yesterday's close would be only a trifle more than $125. 
    Third, starting on Monday, I'll buy calls that cost at least $200. They'll rise and fall almost as much as the $100+ calls, and they'll be less susceptible to dips in the stock price.
    Fourth, about ⅔rds of Mr. Meiers' suggested stocks aren't suitable for margin purchases. This is a tricky subject, and unless someone is well-versed and experienced in options strategies, I'd recommend sticking to Mr. Meiers' script. If it can return 25% every two months, it would quadruple every year. And if a way can be found to keep one's money fully invested, it should allow quadrupling every two or three months.
    I'm just getting warmed up, but once again, I've run out of time. If I can arrange it, I'll write more tomorrow.


2011-2-4 (Friday) The market indices have dipped for the past two days, and then soldiered on to higher highs.  The NASDAQ Composite climbed 15.42 points (0.58%) to 2,769.30. The Dow gained 29.89 points (0.25%) to end at 12,092.15, while the S&P 500 added 3.77 points (0.29%) to close at: 1,310.87. Oil closed down a little at $89.12 a barrel , while Gold ended at $1,349. The VIX dropped to 15.93.
    Once again, it's almost midnight so I'll have to be brief.
    I've been experimenting with TopStock Portfolios' Stock-a-Day trading system. One little technicality that I've encountered is that Richard Meiers send his stock trade instructions two-to-four minutes before the markets open. By the time you get his email, open the associated web page and read it, and then actually buy the stock, you may not get the opening price... and prices tend to move very rapidly in that first minute. Still, that's a small matter, and of course, the price of the stock could move up or it could move down in that first minute. Generally, though, that's a footnote to what appears to be a very successful service. Mr. Meiers computes his gain for the 1¾ months he's been in operation to be 24.66%, which is much less than my computations predict. But I'm treating his individual stock percentage gains as though they occurred sequentially, , whereas I imagine that his calculations are predicated upon the return on the maximum amount of capital he has to invest at any one time in order to achieve his objectives. (The maximum number of stocks that he had in play at any one time between December 15th and January 15th was, I think, 7 stocks.) This means that when he has only one stock in play, the other 6/7ths of his capital is sitting idle.  
    The scheme I'm planning to try, in an effort to keep all my money invested in Mr. Meiers' stocks, is this. Monday morning, he may proffer a new stock choice. My strategy would be to put all my money in that new first stock choice Then if he recommended a second stock on Tuesday, I'd sell half my shares of the first stock and invest that half in the second stock This would cost me sales commissions, but I might be able to time my sale and my purchase, selling half of the first stock at a moment when its price is momentarily up and reinvesting that half in the second stock at a time when the second stock is momentarily down, in an effort to offset the slight sales commissions. On the third day, if Mr. Meiers added, for example, two more stocks, I would sell half of each of the first two stocks (bringing them down to a quarter each of my initial investment) to get the money to buy the third and fourth stocks. That would generate more sales fees, so this might not work all that well, but it would keep all my investment money at work except for times like tonight when Mr. Meiers' recommended portfolio is 100% in cash. 
    At this juncture, it's not a problem for me because I'm only investing a very small fraction of my investment capital while I check this investment service to make sure that it works.
    I've also made "variations on a theme" on Mr. Meiers' recommendations. For example, at the moment the markets opened on Wednesday, I bought 40 February 19th at-the-money calls on his selected stock for a price of $123 a call. Then later on Wednesday, the stock rose smartly, and I sold my 40 calls for an $824 profit after the price of the stock had peaked and had  begun to fall. Next, I made what could have proved to be a very expensive mistake: yesterday, I bought 50 more calls for $151 a call... $7,550 worth of calls. The stock continued to fall, and by the end of the day, I was about $1,000 in the hole. I was depressed last night. Then this morning. Mr. Meiers decided to close out his position in the stock at a small profit, and I was really left in left field. I nervously tried to convince myself that this stock would rise again, but I didn't really believe me. Finally, this afternoon, almost at the end of the trading day, I glanced at my screen and there were my option right back at $151 a contract! I quickly parted company with all my calls and walked away neither richer or poorer than when I had strayed from the straight and narrow. From now on, if I decide to take profits before Mr. Meiers leads us out the briar patch, I won't buy back in unless I can re-purchase the stock at or below the opening price at which he originally recommended it. 
    There's more but it's one am. I'll have to finish tomorrow.


2011-2-2 (Wednesday) The market indices ended flat today. The NASDAQ Composite drifted down 1.63 points (-0.06%) to 2,749.56. The Dow inched up 1.91 points (0.02%) to end at 12,041.97, while the S&P 500 dropped 3.56 points (-0.27%) to close at: 1,304.03. Oil closed up a little at $91.46 a barrel , while Gold ended at $1,335. The VIX dropped 0.33  to 17.30.
    Stock futures are down a bit tonight, after Monday's and Tuesday's run-ups.
    There isn't a whole lot of news tonight. Jim Lowell writes: Buy emerging markets where you can.  


2011-2-1 (Tuesday) The market indices soared again today, with the Dow and the S&P 500 breaking through to new two-year highs. The NASDAQ Composite gained 51.11 points (1.89%) to 2,751.19. The Dow advanced 148.23 points (1.25%) to end at 12,040.16, while the S&P 500 added 21.47 points (1.67) to close at: 1,307.59. Oil closed at $90.99 a barrel as concerns about Mid-Eastern political unrest eased somewhat, while Gold ended at $1,343. The VIX dropped 1.9  to 17.63.
    The Dow and the S&P 500 have decisively penetrated the 12,000 and the 1.300 levels, respectively: Market uptrend resilient despite cross currents. The indices have left gaps in their rapid ascensions, insuring that on the next pullback, they will fill in their gaps. This means that there will be chances to buy in at lower market prices than those tonight. Of course, there are no safe predictions where the markets are concerned, but logically, we might expect to see the indices rise a bit further tomorrow, followed by a day or two of declines. 
    Irwin Kellner has written: U.S. economy looks ready for takeoff.  
    Market futures are slightly negative tonight.


2011-1-31 (Monday) The market indices regained a fraction of the losses they sustained last Friday: Markets tend to take crises in stride. The NASDAQ Composite annexed 13.19 points (0.49%) to 2,700.08. The Dow recouped 68.23 points (0.58%) to end at 11,891.93, while the S&P 500 added 9.78 points (0.77) to close at: 1,286.12. Oil closed up at $92.22 a barrel on concerns about Mid-Eastern political unrest, while Gold ended at $1,334. The VIX dropped 0.51  to 19.53.
    Although the market indices appear to be rebounding from last Friday's debacle, my investment advisory service is in a selling mood. 
    Stock market futures are modestly elevated tonight, so at least at the opening tomorrow morning, the indices should reflect tonight's enthusiasm.   
      
2011-1-31 (Monday Morning, Before the Bell) Stock market futures are up significantly this morning.

2011-1-30
(Sunday Night)
Stock market futures are flat tonight, so it's anybody's guess what the morning will bring.


2011-1-28 (Friday) The indices have fallen out of bed today: U.S. stocks losses deepen as Microsoft, Ford drag Market Snapshot - MarketWatch. The NASDAQ Composite pared 68.39 points (-2.48%) to 2,686.89. The Dow was slammed 166.38 points (-1.39%), closing at  11,823.70, while the S&P 500 dwindled 23.2 points (-1.79%) to close at: 1,276.34. Oil closed down at $89.49 a barrel, and Gold ended at $1,339. The VIX dropped 3.82 at  to end at 20.04.
  
   The cause of this mini-crash was the turmoil in Egypt, some negative economic news (January consumer sentiment dips, Growth picks up to 3.2%), and the fact that a weekend was approaching during which traders didn't want to be caught off-guard. The general perception is that the markets will bounce back next week: Wall Street looks to rebound on earnings.   
   
How to profit from consumers in emerging markets
  
  The TopStock Portfolios daily stock trading service has returned 18% and change this week by my reckoning. I've been using the system for a week or two now, but am about to become serious about employing it for my investing. At 18% a week, you would double your money every four weeks (every 20 trading days), and could more than 1,000-fold your money in a year.


2011-1-27 (Thursday Afternoon): The indices continue to defy the law of gravity, as the Dow and the S&P 500 continue to bump against resistance at 12,000 on the Dow, and 1200 on the S&P 500. They continue to be overextended, but as Lord Keynes famously said, "The markets can remain irrational longer than we can remain solvent." The Dow keeps penetrating, or bumping against the 12,000 level only to be pushed down again. Ditto for the S&P 500. So how will this turn out? Probably after bouncing against resistance for a while, the buyers will exhaust the sellers, and the indices will move higher. Then, when it's least expected, when the bears have finally said, "Aw, shoot, there's nothing  standing to stop these markets now until we get three percent higher," and have invested their money, the indices will gradually drift lower and lower, followed by a plunge that harvests the maximum amount of money from bulls and bears alike as the markets correct.


2011-1-24 (Monday Night): The indices powered ahead today.  The NASDAQ Composite soared 28.01 points (1.04%) to 2,717.55. The Dow was up 108.68 points (1.04%) to  11,980.52, while the S&P 500 added 7.49 points (0.58%) to close at: 1,290.84. Oil closed down at $87.72 a barrel, and Gold ended at $1,334. The VIX dropped 0.82 at  to end at 17.65.
    As reassuring as today's action may seem, professional investors are in an amber- or red-alert mode. The divergence between the Dow, which keeps hitting new two-year highs, and the NASDAQ, which hasn't recovered its January 11th peak, are striking. Storm warnings are posted on this blue-sky day. I've remained in cash today.
An Update on TopStock Portfolios' The Daily Decision Stock Trade Service      
    On January 10th and January 11th, I recounted the claims made for TopStock Portfolios' trade-a-day stock trading service. They were spectacular. In a prior incarnation, TopStock Portfolios' trading director had managed to double his clients' money in two months. However, at that time, there wasn't yet much of a track record for the new one-a-day stock trading service. Now, the first month's performance has been posted, and they're even more spectacular. The dates, and entry and exit prices are listed for the trades, so it's easy to check the authenticity of the claims. (Of course, the period from December 15th to January 15th has been one of rising stock prices, but this stock trading service trades both long and short.)  The service showed a compound gain over the month of 1.677111048... 67.7%. If a portfolio grew by 67.7% a month, how much would it gain annually? Brace yourself!... a factor of 495-to-1! Unfortunately, it's not quite this lucrative. These stocks typically have to be held for several days, so the gains must be divided by the maximum number of stocks that must be held at any one time. From what I could determine, the maximum number of stocks in play at any one time was seven, from January 14th to January 19th. Yesterday, there were only two invested stocks. This means that at least five-sevenths of the portfolio was sitting in cash  One way around this would be to sell portions of previously recommended stocks to raise cash to buy new stock recommendations, so that one's money is always fully invested.
    Also, these numbers presumably don't include stock trading commissions. For some of the major brokerage firms such as Vanguard, Fidelity, Ameritrade, etc., the trading fee is on the order of $7 to $8 for any number of shares traded. The lowest priced brokerage service I've found, Interactive Brokers, charges $1.00 for the first 100 shares and ½¢ a share for each additional share. 
    These prices put trading costs down in the noise level. 
    Can we really hundred-fold our money in a year? I don't know, but I'm willing to risk a little money trying it. (One advantage to a scheme that grows your money very quickly is that you can trade investment time for investment risk. A dollar 100-folded every year would become $1,000,000 by the end of the third year.)  
    
The Daily Decision Stock Trade investment advisory service has an introductory price of $350 for the first year ($700 a year after that). 
     Stock market futures are flat tonight. 


2011-1-21 (Friday Night): The indices closed mixed today, with the Dow and the S&P indices up, and the NASDAQ Composite down: Dow boosted by earnings, tech shares lag The NASDAQ Composite fell another 14.75 points (-0.55%) to 2,689.54. The Dow was up 49.04 points (0.41%) to  11,871.84, while the S&P 500 split the difference by rising 3.09 points (0.24%) to close at: 1,283.35. Oil closed at $89.10 a barrel, and Gold ended at $1,342. The VIX was unchanged at  to end at 18.47.
   
The S&P 500 is still below the price where I sold my timing-directed ETF's (MVV and TNA). I'll be watching closely on Monday to see whether or not to buy them back.
   
There isn't a lot of commentary discussing where the markets might be headed. I found a little news on various news sites: GE lifts Dow, S&P 500 but S&P's 7-week streak ends, and Bar set high as stocks face pullback. Some analysts are calling for further declines in the indices in order to work off their overbought states. TopStock Portfolios' David Moenning offered this overview this morning: What's It Mean? (Another good article on the TopStock Portfolios website is: Tepper: No Longer An "Everything Will Go Up" Market, But....


2011-1-20 (Thursday Night): The indices recovered almost all their losses, though in an uneven way. The NASDAQ Composite retrenched 21.07 points (-0.77%) to 2,704.29. The Dow slipped 2.49 points (-0.02%) to  11,822.80, while the S&P 500 droppeded 1.66 points (-0.13%) to close at: 1,280.26. Oil closed at $89.76 a barrel, and Gold ended at $1,348. The VIX rose 0.68 to end at 17.99. 
    Of course, the number one question is: what happens next? Has this been a two- or three-day hiccup or is it the sneaky beginning of a deeper pullback? When bull markets top, they generally drop, come back almost (but not quite) to their peak, and then dive lower. The retail investor is lulled into a false sense of security by the apparent comeback, and is taken by surprise when the indices fail to regain their prior peaks and work their way lower sufficiently innocuously that the little guy has lost a lot before he realizes that the music has stopped.
    As so often happens, there's no news available to me concerning where the markets will go from here. I'll buy back in if the indices rise much further.  
    There’s a better way to play emerging-markets  
      
2011-1-20 (Thursday Noon): Even though the indices are moving back up, it's probably still time to sell, although the case isn't as solid as it was earlier today: U.S. stock indexes fall as correction begins. TopStock Portfolios has this Technical Talk: How Much is Enough? and this Great Expectations or Just Because? to say about what's happening at the moment. And it wouldn't be unprecedented to see the markets bounce today with further downside ahead. But in the end, the markets will do what they please, and we (or at least I) have to make judgment calls as to what to do when.
    I've sold the fraction of my holdings that responds to market timing. (Part of it is in mutual funds that can't be bought and sold casually.)
    We can always buy back if the market rebounds.

2011-1-20
(Thursday Morning):
 Stocks have fallen below their moving averages, meaning that we're seeing a market correction unfold. It's time to sell!


2011-1-19 (Wednesday Night): Stocks pulled back today, with the NASDAQ Composite falling about 1½ %, the S&P 500 shrinking about 1%, and the Dow only retreating about 0.1%. (The only reason the Dow didn't drop more was because IBM posted outstanding results, and rose sharply, helping to offset declines in the Dow's other 29 components.)  The NASDAQ Composite lost 40.49 points (-1.46%) to 2,725.36. The Dow fell 12.64 points (-0.11%) to  11,825.29, while the S&P 500 dipped 13.1 points (-1.01%) to close at: 1,281.92. Oil closed at $90.75 a barrel, and Gold ended at $1,369. The VIX was unchanged at 17.31. 
    So what should we do next? The only reason to sell would be to hope to pick up the same investments at lower prices late, and for me at least, that's never worked. Then, too, so far, this is just a one-day blip. There was very heavy buying going into the close today. Market futures are up slightly tonight. The markets are certainly overbought, and there's certainly a high level of complacency in the media, but money continues to pour out of bonds and into stocks.
    We'll see what happens over the next two or three days.
    Mark Hulbert writes: Full crash recovery for some advisors.


2011-1-18 (Tuesday Night): Yet again, stocks rose to new 30-month highs. The NASDAQ Composite gained 10.55 points (0.38%) to 2,765.85. The Dow accrued 50.55 points (0.43%) to  11,837.93, while the S&P 500 added 1.78 points (0.14%) to close at: 1,295.02. Oil closed at $91.51 a barrel, and Gold ended at $1,373. The VIX rose 0.41 to 15.87. 
    Michael Ashbaugh observes (Nearing resistance) that the markets are approaching major resistance levels. Will they break through? For the S&P 500, this comes at 1,313. But to sum it up, "Very simply, the S&P remains within a strong uptrend that tracks comfortably above its 20-day moving average."
    Simply put, the markets will pull back sooner or later, giving us a second chance to buy in, but for now, a lot the money continues to flow in.
    Mark Hulbert argues that Inflation doesn’t have to be bad for stocks.
    Irwin Kellner takes on The incredible shrinking dollar, and Peter Brimelow tells about a Baby boomer bull now getting worried.


2011-1-14 (Friday Night): Stocks rose to new 30-month highs today: Stocks hit a 30-month highThe NASDAQ Composite advanced 20.01 points (0.73%) to 2,755.30. The Dow rose 55.48 points (0.47%) to  11,787.38, while the S&P 500 added 9.48 points (0.74%) to close at: 1,293.24. Oil crept up to $91.67 a barrel, and Gold slid to $1,361. The VIX was unchanged at 16.39. 
    How to stay in the market’s sweet spot  Howard Gold argues that small-cap growth stocks are the real buy at the present time.
    Topstock Portfolios had this to say about today's market action: Technical Talk: The Trend is Your Friend, But...., and this about owning government bonds: Should You Be Selling Gov't Bonds? (PIMCO Is).


2011-1-13 (Thursday Night): Stocks fell a little today: Why The Dive: Revisions to Philly Fed Report.    The NASDAQ Composite retreated 2.04 points (-0.07%) to 2,735.29. The Dow lost 23.54 points (-0.2%) to  11,731.90, while the S&P 500 rose 2.2 points (-0.17%) to close at: 1,283.76. Oil softened to $90.95 a barrel, and Gold slid to $1,376. The VIX inched up 0.15 to 16.39. 
    Peter Brimelow points out that the three best-performing investment newsletters for 2010 were run by octogenarians: Triumph of the geezers in 2010.
    The TopStock Portfolios website has published: Technical Talk: Weebles Wobble But... .
    S&P, Moody’s caution on U.S. debt  
    Nutting: Economy's limping along on bum leg  
    Gasoline’s prepping for a return to $4 a gallon  
    Maybe I should mention that we've been snowed in all week, which means that Amber has been here 24/7, which means that Daddy has been conscripted for entertainment, which means that this website has had to take a back seat for the week.
    Stock market futures are neutral tonight.


2011-1-12 (Wednesday Night): Stocks rose about ¾ths of a percent today: Recovery hopes lift Street, to hit new two-year highs. The NASDAQ Composite climbed 20.5 points (0.75%) to 2,737.33. The Dow gained 83.56 points (0.72%) to  11,755.44, while the S&P 500 rose 11.48 points (0.9%) to close at: 1,285.96. Oil jumped to $92.07 a barrel, and Gold ended at $1,387. The VIX fell 0.65 to 16.24. 
    Emerging-market plays (video)  
    Emerging-markets ETFs stumble into 2011  
    Brazil: It's the new China  


2011-1-11 (Tuesday Night): Stocks cranked out modest gains today: Stocks cheer Alcoa result, and  Rally to Portugal's defense. The NASDAQ Composite escalated 9.03 points (0.33%) to 2,716.83. The Dow added 34.43 points (0.3%) to  11,671.88, while the S&P 500 rose 4.73 points (0.37%) to close at: 1,274.48. Oil jumped to $91.11 a barrel, and Gold ended at $1,384. The VIX rose 0.4 to 17.54. 
    My investment advisory service has posted Bulls, Bears (and Cubbies) on their website. Among its noteworthy comments: "Make no mistake about it; someday this glorious bull run in the stock market WILL end. However, based on the action we've seen recently, that "someday" doesn't appear to be now. Sure, stocks could and probably should pull back in the near term. Frankly, this may be what we're seeing now (after all, sideways might be the "new down"). And there is certainly a possibility that Wednesday's auction in Portugal and/or the Thursday auctions in Spain and Italy could initiate a corrective phase. But as I wish someone had told me back in 1985 and again during the early days of the bulls dynasty, we're watching a simply dominant performance by the stock market bulls right now. So, instead of fretting about what might trigger the next little wiggle and giggle to the downside, it is probably better to understand the true nature of the team. In other words, this is a bull market - enjoy it.
    Michael Ashbaugh has this to say about the present stock action: Ashbaugh: S&P, Nasdaq survive key tests
    Mark Hulbert says, Contrarians say gold headed higher, while Rex Nutting notes that Small businesses may be growing again.
    Also, U.S. wholesale-level inventories decline.


2011-1-10 (Monday Night): Stocks retreated a little further today.  The NASDAQ Composite escalated 6.72 points (0.17%) to 2,707.80. The Dow declined 37.31 points (-0.37%) to  11,637.45, while the S&P 500 fell 1.75 points (-0.14%) to close at: 1,269.75. Oil closed at $89.35 a barrel, and Gold ended at $1,376. The VIX rose 0.4 to 17.54. 
    TopStock Portfolios concludes that short-term, the markets are very overbought, sentiment is far too optimistic, and the markets are primed for a short-term downdraft: Change In The Air? Intermediate-term, we're in the second leg of a cyclical mini-bull market. Their forecast suggests that price action may be sloppy in mid-January, followed by a rapid climb into February: One Last Prognostication For 2011: Ours. The markets should continue to rise in a choppy fashion into May and then rally over the summer. Beginning in early September, a stiff decline should ensue until early December, when a year-end rally might be expected. They strongly caution that this is based upon typical cycles, and is no substitute for a daily and a weekly response to what the markets actually decide to do. 
     U.S. dollar's role is vital: Sarkozy  This article is really about dethroning the U. S. dollar as the world's reserve currency.
    Peter Brimelow presents, Schultz’s swan song.  
    The Marketwatch Forecaster of the Month says, Economy rising, but will it last?.  
    Stock futures are up slightly tonight.  


2011-1-7 (Friday Night): Stocks fell somewhat today in the face of a disappointing job report: All About Jobs (Again). The NASDAQ Composite retreated 6.72 points (-0.25%) to 2,703.17. The Dow dropped 22.55 points (-0.19%) to  11,674.76, while the S&P 500 fell 2.35 points (-0.18%) to close at: 1,271.50. Oil closed at $88.48 a barrel, and Gold ended at $1,370. The VIX declined 0.26 to 17.14. 
    Traders were hoping that the job numbers would show that the U. S. had turned a corner, and was on its way back up. But U.S. economy, you are a tease. "After a questionable 297,000 increase in the ADP employment report earlier in the week, the markets were primed for a blowout gain in the government’s official report on nonfarm payrolls for December. We didn’t get it. Payrolls rose by 103,000 on the month, less than the 175,000 median forecast and much less than the 300,000 some analysts were hoping for. Read MarketWatch's full story on the payrolls report. 
    "The unemployment rate fell to 9.4%, the lowest in a year and a half. It’s hard to celebrate a drop in the jobless rate that’s due, in part, to a decline in the number of people in the labor force. The participation rate fell to its lowest level of this recession. For adult men, the participation rate fell to a record-low 73.6%.
"
    "
We know intellectually that this recovery will be painfully slow. But we are impatient. We want the nightmare to be over. And so we’re receptive emotionally to the argument that we’re just about to turn the corner. Maybe next month."
    Mark Hulbert has written: Government shutdown and the stock market.  
    Goldman Sachs Ups Year-End S&P 500 Forecast  
    Goldman sees S&P at 1,500 by year-end  
    Jobs data disappointing, but not bad  
    Joblessness at 19-mo. low  
    Technical Talk: Bears Getting Back In The Game 
    After thinking about it, I suddenly realized that Richard Meiers' three-month track record detailed in The Daily Decision Stock Trade may not include transaction costs... and that would make a  difference in the reported returns. For example, suppose that someone decides to invest $10,000 to buy 1,000 shares of a day-traded $10 stock. Suppose that the stock rises 1% between the time it's bought at $10,000 and the time it's sold at $10,100, for a day's profit of $100. The minimum difference between the bid price and the asked price of a share of stock is 1¢. (It can sometimes be 2¢ a share or even higher.) Since we'll buy at the asking price and sell our stocks at the bid price, we'll pay at least 1¢ a share to cover the spread between the bid price and the asking price... $10 for 1,000 shares of stock. Then at Interactive Brokers, the commission fee for our trade will run $1 + $4.50 when we buy and $1 + $4.50 when we sell, the total commission cost would be $11. Adding that to the presumed $10 "spread" cost gives us $21 for our total trading costs for the day. This means that the first 0.21% (or more) of our gain on the day goes into simply paying the transaction costs. on a day when we make 0 gains, we'll lose 0.21% (or more) through transaction costs. 
    For a $20 stock, we'd be buying 500 shares. The "spread" cost would be $10 and the trading fees would be $6, for a total transaction cost of $16, or 0.16%
    For a $50 stock, we'd be buying 200 shares. The "spread" cost would be $4 and the trading cost would be $3, for a total of $7, or 0.07%.
    Richard Meiers' portfolio rose at an average rate of about 1.00% per day. If we take $20 to be the average stock price for the stocks listed,  then we would have to subtract 0.16% from the above 1.00% per day average gain, for a net average gain of 0.84%. That would stretch out the doubling-time to about four months, and would give us an annual gain of about 8-to-1. That still would be pretty spectacular.


2011-1-6 (Thursday Night): Stocks ended the day mixed: Retail woes hit Wall Street, All eyes on jobs reportThe NASDAQ Composite advanced 7.69 points (0.28%%) to 2,709.89. The Dow dropped 25.58 points (-0.22%) to  11,697.31, while the S&P 500 fell 2.71 points (-0.21%) to close at: 1,273.85. Oil closed at $88.17 a barrel, and Gold ended at $1,371. The VIX declined 0.38 to 17.40.  
    Facebook plans 2012 IPO  
    How to buy shares of Facebook  
    The unsavory elements behind Facebook deal   
    Boehner cries; birds drop, yet stocks rise   
    Retail fail- High hopes went unmet  
    Jobs optimism is growing  
    Debt debate to test GOP  
    Deficits will climb if health law is repealed- CBO  
    Delamaide on a changing White House  
    See the special report on 2010 performance and 2011 outlook  
    Cyclicals: The new market darlings  
      
    TopStock Portfolios' new variation on their Daily Decision Model is the The Daily Decision Stock Trade service. Their website shows a list of daily trades carried out by their lead trading manager, Richard Meier, between April 8th and July 16th, 2010. Over this slightly-more-than three month period, Mr. Meier, trading one stock a day, slightly more than doubled the capital entrusted to him. At that rate, he would 16-fold an investment nest-egg in a year, 256-folding it in two years, and 4,096-folding it in three years. Of course, I don't expect this to actually happen. Even if Mr. Meier can maintain his track record over a longer period of time than three months, some of the stocks he's trading probably couldn't handle huge inflows and outflows. What works for a $10,000 trade probably wouldn't work for $10,000,000 trade. Also, I don't know if the gains and losses in the list of daily trades in the example cited above included the spreads between bid and asked prices, and if it also included trading commissions. Still, it's an intriguing story.
    Someone like me who has his money in a Roth IRA would experience two problems in trying to use the Daily Decision Stock Trade service. 
    First, the brokerage firm that hosts my account charges about $8 per trade. This means that with two trades a day (one to buy the stock-of-the-day and another to sell it), the daily transaction tab would be $16 a day, the weekly transactions bill would add up to $80, and the annual cost would be $4,000 a year.
    Second, when I sell a stock, I don't get paid for three days. This means that ¾ths of my portfolio would have to be tied up in money market funds, since, for three days, I'd have to use "fresh money" each time I made a trade, until I got back the money from the sale I had made four days earlier.
    Fortunately, there's a way out of this dilemma. Interactive Brokers charges 1¢ for the first 100 shares you buy or sell, and ½¢ a share for each additional share. In addition, Interactive Brokers can set up, for IRAs, margin accounts that aren't subject to the three-day settlement rule. We aren't allowed to trade on margin in a retirement account, but we can trade daily at Interactive Brokers in a retirement margin account.
    Trading costs with Interactive Brokers are still an issue if the number of shares we're trading becomes large (hundreds to thousands of shares). If we're trading more than 1,500 shares, an $8 flat rate for any number of shares traded becomes cheaper than the Interactive Brokers ½¢-a-share trading commission, but if we're trading more than 1,500 shares a day, we can probably afford to pay $4,000 a year in trading costs. But the main thing is: at least it becomes feasible to trade daily in retirement accounts.
    I'm in the process of setting up an account and shifting some Roth IRA money into it to test these ideas. I'm also thinking of establishing a taxable account with Interactive Brokers because (1) if my wife or I withdraw money from one of our IRAs, we can't put it back, whereas in a taxable account, we can, and (2), we can margin a taxable account that slowly, steadily goes up. This would double our rate of gain, or, conversely, halve the three-month doubling time of the Daily Decision Stock Trading service, reducing it to 6 weeks. 
    OK. What would this mean in terms of your (and my) money?
    If Mr. Meier's trading skills can double our money every three+ months, we should be able to 10-fold it in a year. Whether we could 100-fold it in two years would depend upon how much money we were trying to 100-fold, and upon how well this trading process works when more than one or a few customers are involved.
    There's a corollary to this. If you or I come up with a stellar trading scheme that really returned more than. say, 25% a year, it would seem to me that it wouldn't be long until one or more of the people in the chain between us and stock market detected it, and their organizations began to emulate it. And it wouldn't be long after that before so many were trying the same thing at the same time that our stellar trading scheme would no longer work.
    I suspect that "playing" the stock market is a competitive, combative, zero-sum game. I also suspect that what works this year may not work next year.
    The minimum account balance for margin and day-trading at Interactive Brokers (per federal regulations) is $25,000, so you have to be able to come up with that much equity to open an account with them.
    I'm in the process of opening an account, so we'll see what happens.


2011-1-5 (Wednesday Night): The bulls were running at Pamplona again today: Dow's win streak plays on. The NASDAQ Composite advanced 20.95 points (0.78%%) to 2,702. The Dow gained 31.71 points (0.27%) to  11,722.89, while the S&P 500 rose 6.36 points (0.05%) to close at: 1,276.56. Oil closed at $90.34 a barrel, and Gold ended at $1,378. The VIX declined 0.36 to 17.02.  
    Mark Hulbert writes: Last year’s rankings are not this year’s.
    Nick Godt's article is: Hot hands cool and a skeptical bull.
    Paul Farrell's contribution is America’s 10 worst years start right now.
    Two topics commend themselves tonight.
    One is that if we suppose that by December 31, 2011, the markets will be up about 15% from tonight's close, then the S&P 500 will rise about 192 points by year's end, averaging a gain of about 0.8 points a day. The S&P 500 has gained about 20 points over the past three days, which would take 5 weeks (25 days) to realize at the average 0.8 point-a-day rate of rise. In other words, the indices have risen at about 8 times their average rates over the past three days. This means that sooner or later, a lot of backing and filling and sideways movement is going to occur to allow the indices to return to their underlying 0.8-point-a-day trend lines. Bottom line: the markets may correct before they go much higher. That said, though, money is pouring back into the stock markets from the bond markets, and into the U. S. versus emerging markets. Since it looks as though we've got a solid recovery going (although this thesis may be sorely tested every time the markets pull back), maybe it's time to treat this as a normal economic recovery and to buy into the markets before they go any higher.
    The second topic concerns strategies for playing the recovery. My ideas are changing from day-to-day, but two themes suggest themselves.
    One of them is something I've mentioned before: buying deep-in-the-money, long-expiration calls on the emerging market ETF: EEM. The emerging market calls I own are the -EEM130119C46 $46, at-the-money calls expiring on 01/19/2013. They're up 16% over the past couple of weeks. Another way to play this is to buy the Direxion 3X ETF: EDC. This highly leveraged index fund has more than doubled since it hit bottom last summer, and has more than 8-folded since the bottom in March, 2009. Like my calls, it's up about 16% since mid-December. This works great in up-markets, and terribly in down markets.
    Another approach that has an amazing track record in both up and down markets is the  TopStock Portfolios Daily Decisions investment advisory service. Both their Aggressive portfolio and their Hybrid portfolio have quadrupled (!) over the past two years. In other words, on average, their portfolios have doubled each year for two years! Even better, their portfolios thrive in both up and down markets, so you have a measure of safety there that isn't to be found when you're buying calls or leveraged ETFs. TopStock Portfolio trades occur only every few months and, in the case of the new Hybrid Model, between cash and leveraged ETFs. This advisory service can be used in IRAs, and doesn't involve anything complicated.
    I should note that the average annual return for TopStock Portfolios' Main Model over a (simulated?) 28-year period has been 24.76% per year. (The Main Model has never had a "down" year.) My personal persuasion is that their Aggressive and Hybrid Models will do much better For example, in 2009, the Main Model was up 64.48%, while the Aggressive Model rose 155.05% and the Hybrid Model gained 202.32%. In 2010, the Main Model was up 20.00%, while the Aggressive Model returned 61.03% and the Hybrid Model came in with 33.01%. My hope is that these newer models will outperform the Main Model by a factor of two-or-three-to-one, and can double or nearly double our money every year, thousand-folding it in 10 or 11 years..
    How could we "juice" these returns?
    For taxable, non-retirement accounts, one way to almost double the rate of return would be to deposit money in a margin account and then, using 100% margin, buy twice as much as we would using the unleveraged versions of the Hybrid and Aggressive Models. This should be safe because the Daily Decision strategy makes money in both rising and falling markets. In that case, you could nearly quadruple your money every year, thousand-folding it in five-and-a-half or six years. You'd pay 6% or so in (tax-deductible) margin interest, and you'd probably pay straight income tax on your gains. But given such phenomenal rates of gain, it might be preferable to pay an interest penalty to the IRS and keep the money in play.
    This is counting our chickens before they've hatched. The key question is: can you actually bag these kinds of gains?
    I've been testing the Daily Decision Hybrid Model with a small portion of my money for over a year now, and I've been sufficiently impressed with it that I'm in the process of liquidating the rest of my mutual funds and subscribing fully (at least for now) to the TopStock Portfolio strategies.
    Tomorrow night, I'll review one of TopStock's new variations on their Daily Decisions models that, if I understand it correctly, might be much better than even the models described above.

To be continued.


2011-1-4 (Tuesday Night): The markets took a breather today, after yesterday's Great Leap Forward. The NASDAQ Composite jumped 38.65 points (1.46%) to 2,691.52. The Dow rose 93.24 points (0.81%) to  11,670.75, while the S&P 500 hopped 14.25 points (1.13%) to close at: 1,271.89. Oil closed at $91.40 a barrel ($100 oil called 'inevitable' in 2011), and Gold hit  $1,415. The VIX declined 0.14 to 17.61.  
     The indices dropped more than a percent but then partially recovered after the Fed minutes showed no unwelcome surprises.
    From half-empty to half-full  Irwin Kellner observes that businesses are now ready to "accentuate the positive, diminuate the negative". "Whatever you call it, a growing number of companies are beginning to see better times ahead — and are taking steps to ensure that they get their share of the pie. In doing so, these firms will make their opinions a self-fulfilling prophecy."
    "
Evidently, execs figure that the time has come to add good people to their staff while they are still available. This will jump-start the heretofore-moribund economy, thus changing a vicious cycle to a virtuous cycle. Before too long, the rate of growth will break out of the 2.6% pace it has averaged over the first three quarters of last year, thereby turning the fledgling recovery into a full-blown, self-sustaining expansion. This will go a long way toward reducing Washington’s budget deficit — not to mention cutting unemployment as well."
    Holiday-season postmortem  Mark Hulbert notes that when the seven-day Santa Claus rally is as tepid as was this last one, the market tends to rise a little more during the rest of the year than it does when the Santa Claus rally is more robust. In other words, we have good news.
    For consumers, good and bad news in 2011  
    About-Facebook  This article, by David Weidner, discusses the Goldman Sachs investment in Facebook, and what it means for those of us who are outside this fairy circle.
    Banks look to foreclose on their mistakes  
    Rampant optimism no reason for pessimism  
    Michael Ashbaugh explains that the markets are starting the new year with a technical breakout: The 2011 breakout.
    Market futures are down about ¼ % tonight.  


2011-1-3 (Monday Night): The markets leaped out of the starting gates this morning, starting the new year with a major pop to the upside. The NASDAQ Composite jumped 38.65 points (1.46%) to 2,691.52. The Dow rose 93.24 points (0.81%) to  11,670.75, while the S&P 500 hopped 14.25 points (1.13%) to close at: 1,271.89. Oil closed at $91.40 a barrel ($100 oil called 'inevitable' in 2011), and Gold hit  $1,415. The VIX declined 0.14 to 17.61.  
    Retail sales were 13% higher this year than last year.
    Marketwatch has published a trading strategies collection of articles entitled Year of the stock?. One of the most interesting of these may be It’s time to short the market, says Thomas Kee. See also New Congress ready to spar, and Young guns take power in Congress (video).   
    Paul Farrell writes: Reagan insider: GOP destroyed economy. The GOP insider is former Reagan budget director, David Stockwell, Mr. Farrell's point is that Mr. Stockman claims that the Republican Party has already destroyed the U. S. economy rather than that it's destroying the economy. Is he right? Wrong?
    Stock market futures are slightly positive this evening.
    What does Topstock Portfolios make of this unexpected market surge? Technical Talk: Stampede!