Gold bull market

The dow closed up 79 to a new recovery high of 9864. Now we have a major non-confirmation with Transports closing well below their own recent peak of 4015.16.

aAgreat bull market in gold has started , it's a bull market that mirrors the demise of the dollar. Gold is priced in dollars, and as the dollar weakens, it takes an increasing amount of fiat dollars to buy an ounce of gold.
Aside from the Chinese and Indians, the world's population owns no gold. Ask any American whether he owns gold. Ask any fund manager whether he has gold in his fund. As the planet's realizes to its horror that all fiat currency is "worthless" fantasy currency, I believe that there will be a world panic to buy gold. This will set off one of the wildest and most explosive bull markets in history
I didnt have much time to update the blog over past month, moving forward I will try to update atleast once a week.

Is this rally over? I am really cautious now .

I was reading an article from barrons, which I feel is very important to share with my readers.

The U.S. dollar index peaked at the same time the stock market bottomed in March. Since then, the greenback is down 13%, which happens to approximate the year-to-date gain in stocks, though of course the equity market is up 50% since the March low. Nearly every bit of the year's upside has been logged on days when the dollar was weaker. In addition, the Dow Jones Global Ex-U.S. index is up about double the S&P 500's gain, and only five of two dozen national markets, all in Old Europe, have done worse than the U.S. in dollar terms.

These inter-asset relationships probably will change, or at least become less reliable on a daily basis, but it's hard to say when or why. For what it's worth, perhaps the most consensus-bucking opinion on Wall Street is that the dollar could firm or strengthen without obliterating stocks.

Whether this rebound is now fully priced in is the subject of a valid argument, with the equity market no longer appearing cheap. But it's tough to dispute that the profit spring is quite compressed.

The market is at an interesting juncture now -- more so than most times, even.

A year ago, the most resolute bears were calling for the S&P to sink to 1000. Six months ago, the boldest bulls thought we could get up to 1000. We're there.



It shows this rally to have about equaled the duration and magnitude of the doomed rebound off the 1929 lows, and to have outpaced the other post-bear recoveries of the past century.

Another chart worth looking at is how far we are



This chart looks not at the possible amount markets can fall, but rather, how much further the rally can run. It compares 3 prior bottoms with the current one.

Some comments from on above chart :
This rally at this stage is way ahead of all other “real” market recoveries and is most like ‘29-30, thus we can’t plausibly expect it to deliver more upside soon and the market probably needs to correct hard.

I don’t view this as any raging contra signal, just another indication that sentiment remains more cautious than one might expect after a 50% ramp.

Fed rates unchanged

As expected the Federal Reserve left its key fed funds rate unchanged today. More importantly for the stock market they said they will keep this key rate at exceptionally low levels for an extended period of time. This translates into continued low rates on money market funds which average a paltry .25%. With a tremendous amount of cash on the sidelines earning practically nothing we think these investors are going to add some of their money back into stocks fueling the market higher.

Positive comments from the FOMC meeting today sent the averages soaring. The Dow jumped 120 points +1.3%, S&P 500 +1.15% and NASDAQ +1.47%. 72% of the stocks listed on the NYSE traded on the upside and 68% on the NASDAQ.


The recent peak prices for the advance that began at the March lows were Industrials, 9370.07 and Transports, 3749.58 -- both of those highs were recorded on August 7.

Yesterday the Dow closed at 9241.45 while the Transports closed at 3702.98. In other words, the Industrials closed 129 points below their August 7 peak. The Transports closed 47 points below their August 7 peak.

If this advance is to continue, then both Averages will have to rally and close at new highs above their August 7 peaks. If they can't do that or if only one Average betters its August 7 peak, then we are dealing with potential trouble.

Rising stock market will brighten the hearts of Investors

Monetary and fiscal stimulus, along with a rebuilding of inventories will be tailwinds for the U.S. economy for the rest of 2009. These positive effects will begin to fade in 2010 at the same time as consumer spending is constrained by high debt levels. A W-shaped recovery will set in, consistent with the muted growth rates.

In the U.S., inflation risk and currency risk are linked. Should U.S. policymakers lack the commitment or the skill to drain the system of emergency liquidity at the appropriate time, confidence in the U.S. dollar as the world’s reserve currency could erode.

Real estate represents collateral for the entire US economic system. At this point, I'm most interested to see what will happen to real estate (private and commercial) now that the stock market trend has turned bullish. The current conventional wisdom is that real estate will remain "down in the dumps" for years to come. Furthermore, thousands of forthcoming foreclosures will make it that much worse.

My own opinion is that a great deal of real estate (homes, condos) are now underpriced -- they are offered for sale at below replacement cost. Interest rates are low (assuming you can get a mortgage).
At certain times, the stock market and the economy will tend to interact with each other. In other words, a rising stock market will brighten the hearts of investors and the public, and in turn a happy public along with optimistic investors will generate bullish pressure on both the economy and the stock market.

We are in Secular bear market rally

It's clear to me that we are in a rally within a secular bear market (some will call it a cyclical bull market). In other words, it's coming within the confines of a long-term or secular bear market. Old timers saw this same situation during the 1966 to 1974 bear market. At that time we saw a series of cyclical bull markets, all coming within the framework of a long-term or secular bear market.

In the end, that secular bear market ended the way most bear markets end -- amid black pessimism and with blue-chip stocks at great values or "below known values."

What was missing at the March 9 lows? Extreme pessimism was absent as were the great values in blue-chip, dividend-paying stocks sporting yields of 6% to 10%.

Can a 27 year bull market end by 2 year bear market?

Can a 27-year bull market (1980 to 2007) be corrected by a two-year bear market? Most bear markets have tended to last from one-third to one-half as long as the preceding bull market. In other words, the bear market that started in 2007 did not last as long as I would have expected, nor did it produce the great values at the bottom that I would have expected.we take what the market gives us, but we also have free choice. We don't have to swing our bat on every pitch. The market will always be here, and we can chose the pitches we want to swing at.

BOTH the Industrials and Transports are up over 100 points. This is what I call a powerful confirmation, a twin breakout with force. The implications are that the market is heading higher.

We are going to see further selling

Joe Granville states that the bear market ended on October 10, 2008, on a day when 2901 NYSE stocks hit new lows. That ended the bear market, insists Joe, so logically if the bear market actually ended on October 10, then the market has no where to go but up. Well, maybe.

Then there's James B. Stack, who writes and publishes InvestTech Research, which is a very instructive advisory. Jim believes the bear market is over, and he's out to prove it. He displays his Negative Composite Index, which has hit plus 83 (it's been there only a "handful of times in the last 44 years"), and he concludes that "we have very strong confirmation of a new bull market."

Jim then refers to the Coppock Guide which he's followed for years. According to the Coppock Guide, we are now in a "very favorable buying area." James also refers to the advance-decline line, saying that the recent decisive breakout in the advance-decline line ahead of the major indexes is a positive development. "Where breath goes," notes Stack, "the market usually follows. "

Stack adds, "Coming out of the March 9 market bottom, we saw extremely strong momentum in volume and breadth." And this, he concludes, is indicative of a bear market bottom.

Jim then points to the Leading Economic Index, a 12-month rate-of-change. His index has turned up, which, he claims, is a sign that the recession is ending" Well, maybe.

Some comments from one of Investor i follows, who belives we are still in Bear market. The market could just continue to sink with very little in the way of rallying ability, until the March 9 lows are tested and violated. The damn trouble with this market (from the bulls' standpoint) is that it shows no signs of becoming oversold, the Selling Pressure Index just keeps creeping higher, and the Buying Power Index continues to deteriorate. This is one nasty bear market if there ever was one.

Stocks sold off sharply today with all of the major averages falling approximately 2% or more. Over 70% of the stocks on the NYSE and NASDAQ traded on the downside. Leading the averages lower were the industrial and energy stocks. The only industry turning in a positive return was the hospital stocks.


The market averages closed at their lowest levels in two months. The failure of the S&P 500 to move through the 950 area is a near term disappointment for the bullish case. The S&P 500 closed at 881.03 and failure to hold 870 on the downside could lead to further selling.

Market strength deteriorating

Dow was down by 23 points to 8299. Market action in past few days shows continuous deterioration in fundamentals, i suggest to sell 75% of your holding, I will start selling my holding in couple of days.
Here is the reason why i belive so....
We saw 90% down-days on June 15 and June 22. Normally, following a 90% down-day there will be a rally lasting 2 to 7 days. But we've seen nothing impressive following the two June 90% down-days. The latest 90% down-day which occurred on June 22 saw a labored rise in the internals of the market, even though yesterday the Dow actually closed lower as the market lifted feebly higher.


Every day the market does "something." The public always wants to know WHY the market did this or that. Newspapers survive by serving and interesting their readers -- for this reason newspapers feel pressured to supply the "reason" for each day's market move. Of course, this is utter nonsense. We almost never know the real reason for the market's daily movements, and if we try to zero in on the reason, the reason we choose is invariably wrong.

Therefore it is best to forget the "why" of any market movement. For instance, the market may decline on rotten housing news, but the decline had nothing to do with housing news, actually the reason for the decline was a break in the bonds as interest rates pushed higher.

In the end, it is best to treat the market and the news of the day as two totally separate items. The only study of the market that is worth anything is the study of the action of the market itself. The best study of the news is via Bloomberg or Barron's or the Financial Times. But it's always best to keep the two studies totally separate. Or as Keynes put it, "The market can remain irrational longer than you can stay solvent." Of course, an "irrational market" is a market that you don't understand.

Market bouncing up and down like a cat on a hot tin roof

The Dow and the S&P 500 moved higher today breaking a three day losing steak. The Dow ended higher by .70% and the S&P 500 plus .84%. The modest gains can be attributed to a better than expected Index of Leading Economic report showing the strongest gains since 2004 and unemployment claims falling unexpectedly.

The chart below shows the percentage of NYSE stocks that are holding above their 50-day MA. Although the major stock averages are trading near their bear market rally highs, the percentage of stocks holding above their 50-day MA is declining. As of yesterday, the percentage was only 67.7%. This tells us that the main body of stocks are lagging behind the leading stock averages, not a good indication.



This confused market is bouncing up one day and down the next -- like the cat on a hot tin roof.August gold was up 1.60 and continues to creep higher. Creeping slowly higher is bull market action. Sharp and violent corrections are also typical of bull markets.

Dollar down, gold up - Trouble ahead

After hard work of 2.5 years, finally I will be graduating end of this month. I have learned alot during my MBA, and hope to write more about finance and Economy in coming months.
The Dow was down 14.81 to 8277.32.

Today dollar down, bonds down, gold up, it all fits together -- trouble ahead.

It appears that the rally that started from the March 9 low has gathered too many bullish followers and the talk of those ridiculous but unseen "green shoots" is now repeated everywhere.A true bear market bottom usually requires many weeks or even months before the crowd turns bullish. Not so, this time. In a matter of a few weeks, a large contingent of the public and many pros turned optimistic, then outright bullish. Two months after the lows, even such famed stalwarts as Jeremy Grantham and Warren Buffett announced that stocks were a buy.


There's only one "expert" that I take seriously, and that's the stock market. What you hear from the so-called "oracles" costs you nothing, which may be what their advice is worth. But to truly understand the language of the market may take years or even a lifetime. Which, of course, is the fascination of this business.

We may be seeing the end of the US auto industry. Chrysler has filed for bankruptcy. GM is now being run by the United Auto Workers and the US government, hardly an exciting combination. The deal. Let’s say you own $220,000 of the old GM bonds. The government is “offering” to give 80% of the face value of your bonds to the UAW while giving you 45,000 shares of stock. At the same time, the government is offering stock to enough other people to dilute the value of those shares to about ten cents on the dollar or $4,500. By owning stock instead of bonds, you end up further back in the line for repayment in case GM files for bankruptcy.

The two paragraphs below are from “Daily Reckoning” site. Bill Bonner wrote the paragraphs. Bill thinks the government’s “help” in its efforts to ward off the bear market will ultimately turn this recession into a depression.

“In the recession of 1973, Brookings Institution economist George Perry told Congress that ‘we should be pulling out all the stops’ to fix it. The resulting fiscal and monetary stimulus program cost the U.S. 4% of GDP, according to an estimate by Jim Grant. Future generations of Fed governors and Treasury secretaries found more stops...and of course, pulled them out too. In the micro recession of 2001, for example, the combined fiscal and monetary boost amounted to 7.2% of GDP, according to Grant.”

“The deceptions of the Bubble Epoque, 2001-2007, were enormous. The correction has been enormous too. And here are the same economists who mismanaged the economy, offering advice to governments who mismanaged their regulatory roles, about how to keep mismanaged companies alive, so that bondholders who mismanaged their investments might not go broke. That this will result in more misery is a foregone conclusion - at least, here at The Daily Reckoning. The measure of that misery, if our iron law holds, is how adamantly governments fight to keep their mismanagement going. Just looking at the numbers, the toll will be monstrous. All over the world, interest rates have been cut and budgets padded. France’s deficit is running at 8% of GDP. England is running a deficit of more than 12% of GDP. And the U.S. is mobilizing as if it had been attacked by Martians. On the credit side, the feds have cut rates more than ever before, for a monetary boost equivalent to 18% of GDP, according to Grant. As to spending, $13 trillion has been pledged...an amount equivalent to a full year’s annual output of the United States of America. This response is 3 times more (adjusted to today’s dollars) than the U.S. spent to fight WWII. It is 12 times more (relative to GDP) than the total committed to fight the Great Depression.” (courtesy Bill Bonner).

Nouriel Roubini is a professor at NYU, so I’m a natural fan of his. Nouriel was one of the first to warn about the recession — he’s one smart economist. Below is part of a very interesting interview with Nouriel by Lally Weymouth of Newsweek.
Weymouth: How about the deficit the banks are building up?
Nouriel Roubini: In the short term I am supportive of it, because if we didn’t have these fiscal deficits, the recession would become a depression. On the other side, I do agree that this is not a free lunch. We are going to add trillions of dollars to our public debt, which is going to go from 40 to 80 percent of the GDP. There are only a few ways in which you can finance that extra public debt. If you rule out default and a capital levy on wealth, you either have the “inflation tax” or you have to painfully cut spending or raise taxes, and either one is not going to be politically palatable.

Weymouth: What is going to fuel the next growth cycle?

Nouriel Roubini: That is a difficult question. The periods of high growth in the United States in the last 25 years have been characterized by an asset and credit bubble. Whatever the future growth is going to be, this time around it needs to be sustainable and not bubble-prone because we are running out of bubbles to create. We had the real-estate [bubble], tech bubble, housing bubble, hedge-fund bubble, private-equity bubble, commodities bubble, even the art bubble-and they are all bursting.

Weymouth: What makes you different from the other economists?

Nouriel Roubini: We think usually that crowds-on average-can be wiser than individuals. In this case, most people got it wrong because whenever we are in an irrational, exuberant bubble, people fail to think correctly.

Weymouth: Do you believe this is a bear-market rally or do you think it is the market anticipating an economic recovery?

Nouriel Roubini: As we reach newer lows, we may be closer to a level of the market that is fundamentally right. A year ago we were not as close to a true bottom. Today we are closer to it. As we become closer to the bottom of the economy, the stock market looks ahead and sees the light at the end of the tunnel and rallies. In spite of these caveats, I would argue that even the latest market rally is a bear-market rally.

Weymouth: Do you worry about China getting tired of holding our bonds?

Nouriel Roubini: In the short run, China has no option but to accumulate more reserves and dollar reserves. Why? Because if they stop doing that, their currency would appreciate sharply while their exports are plunging. So in the short run, they are going to keep on accumulating. But I have seen a huge number of new initiatives in the last month that suggest [the Chinese] are pushing for the yuan to become an international currency and a reserve currency. They are doing bilateral deals with countries like Argentina and half a dozen others in yuan, not in dollars.

Weymouth: They are moving away from the dollar?
Nouriel Roubini: Yes, slowly they will. First they have to establish their own currency as an international currency. That will take years, but already in a month they have done more than in the last 10 years.

One of the most memorable week of my life

In market action dow was down 52 points to 8422.The current advance took the Industrials to 8574.65 on May 8.It also took the Transports to 3351.17 on the same day. Next, we witnessed a four-day decline.I would like to quote the phrase of one of legends of market,"Follow the money." For that's all markets are -- movements of money. Follow the markets (the money), and you'll know what to expect, where to live and where to put your assets. The basis of the uncanny wisdom of the markets rests on one concept - "Everybody knows more than any one man or any group of men."
Hamilton's famous rule -- "One of the shortest ways of going wrong is to accept an indication by one average which has not been clearly confirmed by the other."

I have found the stock market to be a relentless teacher. The market will zero in on your weaknesses and it will cost you. If you are fearful, the market will find your weakness and it will cost you, if you are overly bold, if you are lazy, if you are impatient, the market will find that weakness and it will cost you. The market is a brutal teacher, but an excellent one.
My investment in Citi is up by 37 %, this return is not bad, considering it only less than 3 months. Moving forward, rally looks tired, as many great investors has said sell in may and buy in oct.

Are we in bull or bear market..?

I was not able to write my blog last week as I was too busy with my dissertation project, sleeping every day at 4 am and going to work by 7 30 am and over the weekend I was catching up with my sleep. I almost done with my dissertation.

Are we in bull or bear market? Its a million dollar question and only time will tell us. I have been following few most respected wallstreet investors , they also seems to be divided on their opinion .
Here is the reason why................
Technical action of the market tells us that we are in bull market.A/D ratio , advancing stocks led declining stocks by a ratio of 2 to 1 over a ten-day period,
gave a buy signal on 23 march , the market’s prospects over the intermediate term are favourable.The A/D Ratio has only flashed 12 buy signals since 1949. They are almost as rare as triple-crown winners. The last buy signal occurred all the way back on February 5, 1991. Prior to that you have to go back to 1987 and then back to
1982.The Dow gained an average of 7.92% over the next three months following an A/D Ratio buy signal. Six months later, the Dow was ahead 14.91% and a year later 18.55%.
Another survey that has long-term bullish implications is the monthly asset allocation poll that AAII conducts. At the peak of the dot-com bubble, the asset allocation was 77% stocks, 8%bonds, and 15% cash. This is how it should be.This is exactly the type of reading one would expect near the tail-end of a lengthy bull market.Everyone was loaded up with stocks, and the last thing they wanted to be was in cash. At the conclusion of the most recent poll, the asset allocation was 41% stocks, 14% bonds, and 45%cash. The cash allocation represents the fuel for the next bull market.

According to dow theory: the primary trend of the market cannot be manipulated.
Most bear markets take the form of a major decline, then a major upward correction, and finally an extended and destructive decline to final lows.my belief is that this bear market will continue to its destination, regardless of all that the Fed and the Treasury have done to end it prematurely. In other words, I believe this bear market will fully express itself, no matter what.

Now, finally, my view is we are in bull market ,I am invested in the market , I have 50% of my cash in the market now.

China and India wants to sell gold

Financial Chronical reports, India and China may press for the sale of the entire gold reserves of the International Monetary Fund (IMF) to raise money for the least developed countries.
The IMF holds 103.4 million ounces (3,217 tonnes) of gold that, if sold, can fetch about $100 billion.
Both prime minister Manmohan Singh and Chinese president Hu Jintao will have to clear the proposal before the representatives of the two countries can take it up at the IMF spring meeting in June in Washington.
The G20 heads of state meeting in London earlier this month agreed to sell a part of the IMF gold to raise $6 billion for poor countries during 2009-11.

This is interesting devlopment,lets see the impact on Gold price in coming weeks.

Sir Harry the Schultz writes this in his latest mailing,"The history of reserve currencies reveals that the position of a country as a superpower (whose currency acts as a reserve currency) tends to rotate in a natural cycle of around 100 years. Will history repeat? From 1450 to 1530 it was Portuguese (80 years). From 1530 to 1640 (110 years) it was Spanish. From 1640 to 1720 (80 years) it was Dutch. From 1720 to 1815 (95 years) it was French. From 1815 to 1920 (105 years) it was British. And then the US dollar gradually dominated the scene until 2009 of a period of 89 years.

The United States dollar is the most widely-held reserve currency in the world today. Throughout the last decade, an average of two thirds of the total allocated foreign exchange reserves of countries have been in U.S. dollars. For this reason, the U.S. dollar is said to have “reserve-currency status”, making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact.

On stock market front ,Citigroup swung to a $1.59 billion first-quarter profit from a $5 billion loss a year earlier. Loss Per Share of $0.18 , valueline was expecting loss on .90 in 1Q. I consider it to be very good performance but most of the earning coming from trading relating activity, for credit card loss in coming months picture is still gloomy. Net credit losses are $7.2b.Tier 1 capital ratio was approximately 11.8% versus 7.7% in the first quarter 2008.





Market looking tired. The Dow was up over 50 today but sold off at the close.

Have a nice weekend.

MACD gave a right signal and we are seeing pullback

I was rather busy over last two days. As I posted in my previous blog MACD gave sell signal and we are seeing pull back. I still insist we are in bear rally.

Treasury Secretary Timothy Geithner intends to expand the Federal Reserve’s new $1 trillion Term Asset-Backed Securities Loan Facility to buy frozen assets, according to people familiar with the proposal. The revamped Fed program will sit alongside the Treasury’s planned public-private investment funds, while the Federal Deposit Insurance Corp.’s role will probably involve buying distressed loans, the people said.
Over the past seven months, the Fed has pumped in roughly $800 billion of new money into the financial system, and last week the Fed said another trillion dollars or more could be created in the months ahead. Fed is doing whatever it can to fight deflation.Inflation is a lot easier to deal with than deflation.
We didnt have obivious bear market bottom yet, values have not appeared yet,though much of the damage has been done. This rally may still go higher too 200 moving day average ( 9000), but still primary trend is down. I will putting some interesting charts over the weekend, so hang on....

Banks leading this Rally

Dow jumped 246 points to 8083, financial stocks surged Thursday, leading a broad market rally after Wells Fargo & Co. surprised Wall Street with better-than-expected results.
The news helped lift shares of other major banks, with Bank of America Corp rising by 35%.

From one of my favourite writers:
"This is a tough market to navigate. ON the one hand the world economy is a mess and completely imbalanced. Half of the world is too dependant on exports (mostly Asia) and the other half (US and parts of Europe) is in a dream world believing that they can consume more than they can produce, can pile up almost unimaginably high debt levels and can live happily ever after.""On the other hand, whenever the natural market forces begin to remedy this nightmarish state, governments step in to halt the corrective process, ultimately making matters worse and pushing the day of reckoning a little further on down the road. But in the meantime, stocks can rise from the inflationary push."

The urge to take on risk is rising. The bear is doing his job, and I expect the retail public to be entering the market in a matter of weeks. The public can never resist a steadily rising market for long, and this market is inching up week after week
As the market rises, volume is dropping. Also, MACD is close to (red arrow) giving a sell signal. Let's see how the market works around these indications.



Have a good weekend.

I correctly Predicted this rally on 11 march,check blog dated 11 Mar

If there's one thing I've learned about the market, it's that the markets are always urging us to do the wrong thing. What are the markets urging us to do now? Here's the way I see it. The stock market is telling us to "dive in," and that " a big new bull market is starting, and we should rush to put our dollars in the market." Conversely the gold market is urging us to get out of gold.
My advice is do nothing and just stay on sideline 100% on cash and wait for buying opportunity which should come in next few months.
Unemployment across the US is climbing dangerously and rapidly
US is under massive debt of trillions of dollar.
US consumer is strapped for money and still loaded with debt.
Everyother company is firing employee to reduce cost.

The latest 23% surge in the Dow Jones Industrials towards the psychological 8,000-level, is its seventh significant rally of 1,000-points or more, since October 2007. During the bear market from 1929 to the bottom in 1932, the Dow Industrials fell by almost 90-percent. There were six bear-market rallies during that stretch, with returns of more than 20%, each one fueling a sense of renewed optimism.
Market is likely to move in trading range , its better to wait before jumping in the market and load stocks.

Advice of one of the most followed wall street investor

............Old timers are fond of saying, "The trend is your friend." The trend may be your friend, but I can tell you that the stock market is not your friend. I've said this before and I'll repeat it -- the stock market is not for the average investor. As is the case with Las Vegas gambling, stick with the stock market long enough and it will take your money and leave you chagrined and angry. In my experience, if you deal with the stock market over any length of time, you will end up poorer and more frustrated than when you started.

Market meeting some resistance

After 3 weeks of straight gains, stocks reaching overbought levels. For the week, the Dow rose 6.8 percent, the S&P 500 gained 6.2 percent and the Nasdaq added 6 percent. The Dow lost 148 points or 1.9% to close at 7,776, the S&P 500 fell 17 points or 2.0% to 816, and the Nasdaq Composite stumbled 42 points or 2.6% to 1,545.

The Nasdaq's relative strength is quite striking, in fact. The Nasdaq Composite Index is now in positive territory for the year, with a 0.6% gain since the end of 2008. The Dow, in contrast, is nearly 10% lower.
Coming weeks will really tell the direction of this nascent bull market. I still staying away from market for now.

Dow surge 6.8%

Dow surged 497 points in todays rally, bank stocks were highlight of todays action. This seems to another exciting bear trap , though we have solid follow up days, but such powerf rally were not seen in previous 34 bull markets since 1900, the advance is too fast , like previous rallies of oct and nov. I will selling my Citi shares in rally for almost 50% profit, i advice to sell the rally and wait for market direction, I may be wrong but bull market has never started such steep rallies. We may seen some selling from here. Bear market tend to be violent and powerful.

Richard Russell, editor of Dow Theory Letters, puts it this way: "In bear markets, corrections against the primary direction tend to arrive without warning and are very rapid, often recovering in a week the bear market damage of a few months. Part of the attraction of a bear market rally [correction] is the speed of the advance. This makes the rally doubly attractive and allows those still in the market the fantasy of recouping their losses in short order."

We are in final leg of this Bear

I was not able to update my blog daily due to my work commitment. I will try my best to do alteast 3 times a week.

Friday dow fell 122 points (1.65%) and S&P 500 15 ( 1.98 %), the rally which started on 9 march have multiple 9-1 days ( Volume of all NYSE stocks that go up on given day). We are in final lag of this bear market, much of the damage is already done and market is forming a base , it may pull back few 100 points on and will start powerful bull market . I am still cautious and waiting for opportunity , though investors who are willing to take some exposure can put 20% of money in stocks.



I have personally invested in Citi( bought 5,000 @ $2.1), it may pull back next week around 2 or may be lower, I feel it is longterm buying opportunity . I also like GE, BOA, Dow chemical,AXP.



Get ready with your CASH market is going to form "W" formation and we will have great opportunity of our lifetime to buy good stocks cheap.

Wow I was spot on

I was spot on, dow added 9% for the week. Market is oversold but looks like we are going up from here. Stocks moved up in consecutive 4 sessions , the main reason was bank of America and citigroup announced that they are profitable in first 2 months of 2009. BOA gained over 40% in past 5 sessions. Its good time to unload some of the stocks in this rally, we are going higher, but i still feel we should move down in few months. Long term investors should remain sideline, we are heading to over bought area, market may go higher in coming weeks.

Wow we are in for rally

Stocks soared on Citi news that it made profit in Jan and Feb, this was disclosed by Mr Pandit via email to employees. Dow rocketed 379 points (5.8 %), Citigroup tanked 38 %. We are in for rally here with 70% of AAII investers in bearish camp. This rally could take down to 8500-9000 range. But I still feel this is another bear trap and good time to let go some stocks.

GDP down by ugly 6.2%

Thank you friends for stopping by and visiting my Blog. I am an amateur investor who uses both technical and fundamental analysis for investments. I can only give my own opinion based on my expereince on market movements, and shall not be responsible for any investment losses that may have incurred based on my advice, i urge you to make your own decisions.



US Markets

The Dow & S&P are at 12 year low, market is oversold and poised for some bounce back.

Stay on sidelines and remain fully in cash. Some economists like Nouriel Roubini are saying recession will last untill end of 2010. Economy can go into ugly "L" shape depression.

US GDP has contracted by 6.2% in final quarter of 2008.



Roubini said the global economy may shrink 1 percent or grow 0.5 percent in 2009, before recovering to about a 1 percent growth in 2010, effectively extending the recession until the end of next year.
Emerging market economies, including China and India, will slow down sharply, he said, adding that “we are already seeing the beginnings of a hard landing.”
China’s economy may grow 5 percent “at best” in 2009 after expanding at an average 10 percent pace each year in the past decade, Roubini said, rejecting the theory that emerging markets are decoupled from the problems in industrialized countries.




Singapore Market :

STI index close at 1513.

Nobel group is one of the few stocks showing resilience at $1 level, but with bad macro economic environment, its better to stay on sidelines.