Global Market Commentary, Analysis and Investments
Warning: serious thinking here…
Big rally yesterday. The Dow was up 274 points. Gold went up very slightly and still closed below $1,200.
What gives? A big change in direction? It's probably nothing. Markets don't go up or down all in one straight move. They play with investors like a cat with a mouse. They tempt him into bear markets and scare him away when prices are rising. They shake his courage at bottoms and addle his brains at tops.
[Read more...]Market internals remain bearish. The rush to cut portfolio risk remains intact. Here is a two-year chart of the S&P 500 (in red) and the iShares High-Yield Corporate Bond ETF (HYG):
Well, they dont make it easy for you.
Yesterday, the Dow rose 225 points. Enough to keep people guessing. Enough to keep people in the market. Enough to give the recovery spotters something to look at and investors something to hope for.
Is the market really headed down…or not?
[Read more...]The Dow Jones Industrial Average bounced 45 points yesterday lifting the index to a new 18-month high of 10,895. This achievement punctuates a dazzling one-year rally that has lifted the Dow more than 70% from its lows.
During the early days of this epic rally, bullish investors had both low valuations and an improving economic trend on their side. The price-to-earnings ratio of the S&P 500 index was about 40% below its five-year average. While at the same time, the worst of the credit crisis had seemed to have passed.
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The Central Bank Stock Market Indicator
“Bernanke comments keep equities in check,” says a headline in The Financial Times.
Sure enough. The Dow ended down again – 21 points down. It’s been going down for five weeks. But it’s still above 12,000. So there’s nothing to be alarmed about.
What did Ben Bernanke say? Not much really. He allowed as to how the economy was not as strong as he had hoped. But he said things were getting better. And he didn’t mention QE3.
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