2/28 Kelly Letter Topics
Weekly market review
Manufacturing rise
Euro zone risks
State fiscal disaster
China pulling back
Consumer conf.
FDIC bank closures
Bernanke on rates
Greek protests
Falling home sales
Dying bank reform
Oil price trends
Toyota saga
Natural gas trends
Gov killing economy
US rescue bot
Dividend ideas
Japanese women
2010 EDITION
Much has changed; good investing has not
The Neatest Little Guide to Stock Market Investing, 2010 Edition
Two-thirds of the evidence in this small piece of the market puzzle says buying is the move to make now. The other one third shows that even if buying now is early, it's probably not terribly early.
Nobody ever knows the exact bottom. You're always going to be a little early or a little late, depending on how you approach the analysis. In other words, the best you should hope for is to get close. The numbers now say that we're close.
Indeed, we were. On July 15, the S&P 500 tracking ETF SPY bottomed at $121 and then topped out at $131 on August 11:
It was a nice one-month rally or so, and now it looks like we're back to cautionary mode.
The S&P 500's rising wedge shown in the chart above is a bearish sign, as it usually breaks away to the downside. The Nasdaq poked its head above its bear market trendline from last October, but then quickly headed lower again. Several indexes have bounced off resistance at their 200-day moving average lines.
I would put buying on hold, and consider setting stops under profits you made in the summer rally. There'll be a better chance to buy later.
