Oh, Happy Day
- In what may be one of the greatest percentage gains in history this day was a stunner.
- DOW +5.8%
- S&P +6.3%
- Transportation index +7.2%
- NASDAQ +7.0
- Internals were stupefyingly positive: 2.1 billion shares traded up, only 78 million down.
OK, that was nice, now what?
- The economy still stinks. Retailers are still selling shirts at 70-90% off. Industrial machinery orders are almost non-existent, auto sales are zilch, emerging markets are no longer emerging, doubts about bank survivability are still abundant, etc, etc.
- But, the argument will go; current share prices reflect all those trouble. Oh, yeah?
- There are estimates for the S&P of $40 for this year. That puts the market at about a 17 P/E. Not historically high BUT what are the Earnings? Hmmm, don’t really know right now.
- You hope this is different from the bump we experienced on March 4th. Only to be disappointed on the next market day.
- The S&P closed at 719.60. Shorter term traders will look at 745 as both resistance and break-out. Should we get there professionals are likely to back up the truck. Soooo, you can wait for that. However, we could get that tomorrow. Remember, we were up 43 S&P points today!
- Or, you can wait for more of a confirmation. That would come next Tuesday, or the fourth market day after today’s rise.
- But waiting hath its problems, as well. There is such an enormous short position out there we could experience another melt-up like today.
- So, it is one day at a time. The all clear signal has not sounded. Day trading will trump buy-n-hold-n-forget-it for sometime. If you are not attuned to that you may want skip it. If you must be in……..tip-toe in with half or quarter positions (with stops!). Buy the companies, not the ETFs. Don’t buy the financial ETF; buy Goldman Sachs or Morgan Stanley. Don’t buy the tech fund, buy Intel or Cisco or IBM; don’t buy a general market growth fund, buy something like 3M, or J&J. Because, if this thing doesn’t have legs you will want to get out. Fast.
Celebrate the day, be happy but don’t spend the rent money. Oh Happy Day!-Choeur Gospel Celebration & S. Desgroseilliers
Have a wonderful Tuesday evening!
