Archive for the ‘Investment Trends’ Category

July 4,2011 The Bull Market Alive and Well

Video Market Update:   watch?v=oOvkbOMpLi4 (6 minutes)

Happy Easter.

Video Summary:

Last week earnings releases from the technology sector drove the market to strong gains.   But the real leader last week was the emerging market sector.  For instance, South Africa, South Korea, Thailand, Emerging Europe, and Indonesia gained 3-5%.   Below are a few US stocks I profile in the video that hit new highs last week.  This is the type of behavior I would expect to see in a strong bull market.

Stocks below have a market cap greater than $10 billion:

1. International Business Machines Corp. (NYSE:IBM): Up 2.14% to $168.28. International Business Machines Corporation (NYSE:IBM) provides computer solutions through the use of advanced information technology. The Company’s solutions include technologies, systems, products, services, software, and financing. IBM offers its products through its global sales and distribution organization, as well as through a variety of third party distributors and resellers.
2. Oracle Corp. (NASDAQ:ORCL): Up 1.88% to $34.75. Oracle Corporation supplies software for enterprise information management. The Company offers databases and relational servers, application development and decision support tools, and enterprise business applications. Oracle’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.
3. SAP AG (NYSE:SAP): Up 1.79% to $66.62. SAP AG is a multinational software company. The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services. SAP markets its products and services worldwide.
4. EMC Corporation (NYSE:EMC): Up 1.75% to $28.45. EMC Corporation provides enterprise storage systems, software, networks, and services. The Company’s products store, retrieve, manage, protect, and share information from all major computing environments and mainframe platforms. EMC operates offices around the world.
5. Vanguard MSCI Emerging Markets ETF (NYSE:VWO): Up 0.86% to $50.71. Vanguard Emerging Markets ETF is an exchange-traded fund incorporated in the USA. The Fund seeks to track the performance of the MSCI Daily TR Net Emerging Markets USD Index. The Fund invests its assets in the stocks that make up the Index, holding each stock in the same proportion as its weighting.

Thank you for reading , Enjoy the week.

Video Market Update:   http://www.youtube.com/watch?v=0xkCmi4ARrM (11 minutes)

Summary:  (US Technology, REITS, Health Care, Dow Jones Transportation Index, Oracle, Google, Open Text, LULU.

The US and global markets continue to trade in a tight range for the past several months.  Looking over different asset classes (Technology, health care, Real Estate, Materials) all seem to be undergoing a shallow correction.  Yes the Tsunami had a short term effect on the markets but US small cap stocks and emerging markets powered right back.  The Dow Transports sits only a few points below its high made two weeks ago.  Financial stocks are lagging while energy and biotechnology continue their up trends.  The market correction does not appear over and could retest the lows established during the Tsunami.

I will be using this correction to invest remaining cash back into the market.  Many stocks and ETFs are forming sound bases which is constructive and necessary for a healthy bull market to continue.  The economic recovery is on track.  Recent earnings and sales of many key companies have been strong and better than expected job growth numbers are encouraging,  another sign this recovery is just in the early stages.

If you are sitting on cash in low yielding money market accounts and want better returns over the next 1-3 years I would stay away from the bond market at this time and focus your portfolio on growth equities.  I am expecting the current shallow correction  to last a few more weeks or months and then a break to new highs as we begin climbing the excitement, thrill and euphoria stages of the bull market.

Video Market Update: http://www.youtube.com/watch?v=J6txKq3i5RY (10 minutes)

Video Summary:

The market last week pulled back due to the aftermath of the Tsunami that hit Japan and the potential meltdown of a nuclear reactor. The US S&P has spent a record 28 weeks above its 50 day moving average as it rallied from the Aug 2010 lows. The major indexes have been in a correction phase for the last four weeks and now have pulled back 6-10%. Over the weekend the latest news to surface: “U.S., French and British forces blasted Libyan air defenses and armor, drawing intense volleys of tracer and antiaircraft fire over Tripoli early Sunday at the start of a campaign aimed at protecting rebel-held areas that will severely test Kadafi’s powers of survival.”

I was asked this week if any of my clients owned the Japan Exchange Traded fund. No client or my own personal accounts have owned Japan for years. This ETF has never passed my weekly screens so my discipline has been to avoid exposure to Japan. I do believe Japan will recover from this event but will take some time to find its footing. I do not see this event derailing the entire global economic recovery. The Federal Reserve will keep its accommodative monetary policy until the economic engine is firing on all cylinders.

In the following video, I explain how bear markets usually decline in 3 phases. These phases are necessary to change investor sentiment from excitement to panic / depression (creating a buying opportunity). In my historic studies of the market, I have also found market corrections (such as the current correction) also tend to have three waves of fear which are much shorter in duration but also refortifies the “wall of worry”. Our current market has seen two small waves of fear and may have another third wave down.

Short-term we could experience more uncertainty and downside as the market correction continues but I will be using this weakness as a buying opportunity and moving remaining cash into growth stocks and funds. Do not focus on the short term trend but stay the course and remain invested for the next move higher.

Growth stocks, many posting 25-50% gains in the past six months are consolidating nicely and finding support as buyers step in.

The US and global markets continue to move higher.   Investors are starting to “feel” better as the market has posted very strong gains since the Summer 2010 correction ended.  Since September 1, 2010 the Nasdaq (technology index) is up 33%.   Leading stocks and sectors continue to form sound bases and break to new highs.  Investing in growth funds and stocks with strong earnings and sales is  the key to making money in this phase of the market cycle.

In the videos below I describe the “cycle of investor emotions” and why strong gains are likely to continue through 2011 and into 2012.

Part 1, General Market Review http://www.youtube.com/watch?v=PJvyUvMJcXg (6 minutes)

Part 2, Exchange-Traded Funds Review:  http://www.youtube.com/watch?v=ZBRFNRcfzmE (8 minutes)

Part 3, Stocks Review:  http://www.youtube.com/watch?v=J6txKq3i5RY (8 minutes)