Fed Chairman Bernanke speaks in Washington but really steers clear of bullish or bearish market moving statements in my opinion. Nevertheless, bullish sentiments on the Street move the market higher on high volume; the Dow closes deep in uncharted territory - whatever.
The stellar performances of both NASDAQ and S&P indicate a broad market rally. However, the ferociousness of this rally suggests the phenomenon of “momentum” is in play. I am nervous. Momentum investing is like asking for more drinks when you are already drunk. It is an anomaly and there’s bound to be some market correction in the days and weeks ahead. Investors seem to be laughing now to cry later. Regardless, I’ll take the gains.
The folio hops into positive territory after the negative dip yesterday. EBAY more than compensates for Monday’s loss with a respectable 6.1% gain. Actually, I think there’s more upside to EBAY and COST going forward than PG and MSFT. Why? Moving Averages. That’s why. Right now, EBAY and COST are trading above their 50-Day moving averages but still below their 200-Day averages. Both MSFT and PG are now trading above the 200-Day and 50-Day averages. I get the creeps when a stock strays too much, ceteris paribus, from its moving averages.
All the ETFs shine. Even IGE, battered and bruised from the drop in oil prices, manages a 1.2% gain. My faith in IGE remains strong. Small Caps (IJR) and Mid Caps (IWR) hitch rides on the back of the broad market rally to snap a four-day losing streak. What a relief! IWR’s performance over the past month has been woeful.
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