DJIM 46, 2009

A week ago today, we were a little concerned whether the rebound that started two weeks ago would run out of steam.     By Friday‘s close, we’re wondering how soon this market finally closes above 1100 and how much upside is from there.  Even though the investors' sentiment changes from week to week, one thing remains clear and that is the market still has strength.  Once again, the shallow down day on Thursday was "nothing to lose sleep over" as the market pushed back to a 1093SPX close.

It is sort of ironic.    The more you question the strength/validity of this rally, the more this market is trying to convince you who's in charge.    Granted, we've been bullish on this rally since it started.   However,  being bullish and utilizing a very bullish strategy is two different things.    The detrimental aspect to maximizing anyone's return in the last six to eight months is the frequency of trading.    Thinking back,  why didn't we just hold enough JPM, MSFT, AAPL, GS when they were at a much cheaper level and forget about this practice called trading?    Well, it is been tough being a trader this year, but not as tough if were a Bear.    It's tough in a sense that many long term mutual funds were having just as a good year as most traders.   Normally,  good traders way outperform the lazy funds.    However, so far this year and since the rally started back in March, the worst thing that can happen to a Bull trader is to second guess the rally.    Still, we can't really blame ourselves because there's many times when technicals looked a little shaky and there were many moments when things just looked too out of control, bullish wise.      However, at the end, fact remains that we've got to this point because many investors out there are willing to deploy money and push the market up.    Well,  we're sure that we didn't get this kind of bullishness from the media, at least not always.   In conclusion, regardless what people say or predict about this market,  it's always the action that counts the most.

Right now, action does look pretty good.  We are again at the door steps of SPX 1100 and we are currently in a historically bullish trading month to break it higher.    Some say that this market's all about big caps now and that it's a negative.   We actually would take an opposite view.   When the small caps and many inferior quality stocks start to pop up,  it usually means the end of the bull move.   So in a way, we are glad that only the quality stocks are making the move higher these days.   It takes out the speculation work for us.

Mr. Obama is currently touring China and it'd be interesting if there's any trade development out of it or FX noise.   We also have a number of economic data coming out in the week ahead and that'll keep this market in a good spirit if those reports are positive or even neutral as most recently.    There's still lots of sideline money waiting to be deployed.   It literally doesn't take much to move this market much higher.    With six week remaining in the year, will investors/ managers make a massive push to close the year higher?   We think it's not only possible,  it's very likely.

Before the recent the employment report,  we said the market might be looking ahead to the G20 communique and **Bernanke's speech on Nov 16.  That day is Monday (12:15pm) and the market will be looking for this to serve as a catalyst.