• 143 days Could Crypto Overtake Traditional Investment?
  • 148 days Americans Still Quitting Jobs At Record Pace
  • 150 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 153 days Is The Dollar Too Strong?
  • 153 days Big Tech Disappoints Investors on Earnings Calls
  • 154 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 156 days China Is Quietly Trying To Distance Itself From Russia
  • 156 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 160 days Crypto Investors Won Big In 2021
  • 160 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 161 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 163 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 164 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 167 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 168 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 168 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 170 days Are NFTs About To Take Over Gaming?
  • 171 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 174 days What’s Causing Inflation In The United States?
  • 175 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Buy Signal

Dow Jones Industrial Average   10,158
Value Line Arithmetic Index   1,669
30-Year Treasury Index   4.58%

The Big Picture for Stocks: Expect a short term bounce within a cyclical bear market.

Technical Trendicator (1-4 month trend):
Stock Prices
Bond Prices   UP

Our 1-4 month trend indicators have turned up. We reported last week that the sentiment indicators reached a buy point. This week, the momentum indicators have stabilized and turned upward, giving us the buy.

This is a risky buy signal. The market is still vulnerable to a crash if there is any exogenous bad news - a bank failure, terrorist attack, economic news, etc. And longer term, I believe we are in bear market that will last into 2006. I expect a fairly steady stream of bad economic news during the year, with earnings estimates coming down dramatically within a few months. It wouldn't be at all surprising to see the Dow reach 6500 sometime in 2006. But the indicators are positive for now, so we will go with the flow.

For our Special Situations track record, we will cover our shorts in these ETF's - SPY, MDY, and IJR (the large, mid, and smallcap indexes), as well as the Financial Select SPDR (XLF). Also sell the Grizzly short fund (GRZZX) as of Monday's close.

However, we will keep the short position in the Retail HLDRS (RTH). The charts look to me like many of the retailers are just now turning down. Also keep the long position in the Prudent Bear Fund (BEARX). This fund is a short fund, but also often owns gold shares. Gold looks like it is turning up again, so this fund is an OK hedge for now.

I suspect that the best place to find value is in the beaten up microcap stocks. Many of these stocks have been in their own bear market for a year, and could easily bounce a pretty good percentage amount. We have several of these on our Special Situations list.

Back to homepage

Leave a comment

Leave a comment