Wednesday, March 17, 2010

Index Data

Closing values for Wednesday, March 17, 2010:


Trend & Value 50:

1060.84 (up .44%)


China Small Cap ADR 25:

934.03 (down 2.77%)


Precious Metals Complex:

4751 (down .20%)


Commodity ETFs:

2109 (up .72%)


BRIC Basic Materials:

1046.13 (up .12%)


Penny Banks:

1104.36 (up .92%) (corrected)


Foreign Blend:

7270 (up 82)


General Liquidity:

1034.30 (up .46%)


Über-Indicator:

45.69 (up 2.2)

-----

The Über-Indicator hits another new high for the rally... I remember Richard Russell used to say (and maybe he still does, I just haven't read him in a long time) that his Primary Trend Index (PTI) is smarter than he his. Well, the Ü-I is no PTI (and it's not meant to be) and I'm surely no Richard Russell, but, you know, it may well be that my Über-Indicator is 'smarter than I am.'

But speaking of 'proprietary' tools, the special average I showed you last month is just right above the current price of the S&P 500.



whether by coincidence or some intelligent design beyond our understanding, this moving average has served as resistance at every interim peak in the index since September of last year. So it would not surprise me in the slightest to see at least a temporary top come in right here.

However, if the S&P can climb above that special average (and one other with a somewhat longer period which is currently about 1175) then that could really call into question the whole thesis that the advance that began last year has been 'just' a counter-trend rally within a larger bear market.

If you want to be long stocks now, my suggestion is to pick a few of what we'll call 'Large-Cap Laggards.' There aren't many stocks that haven't been participating in this advance, but those that haven't almost have to get bid up from here if the market keeps rising. And if the market decides to turn lower, you will likely have less risk in these 'Large-Cap Laggards' if only because they hadn't surged in price in the first place.

Like I said, there aren't many of these that fit the bill, but here are a couple: Exxon Mobil (XOM) and Monsanto (MON). Odd that a commodity basher like me is pitching two of the biggest names in the basic materials sector, but hey, they have a certain logic to them right now. Besides, these two might be a good hedge from here if you have adopted an otherwise bearish stance on commodities.

Oh, and if this market does keep flying, then the banks are obviously going to maintain their new-found leadership status. But Trend & Value does not advocate chasing anything (except tequila), so I got to put banks down as a (strong) 'Hold'. Though relative to most other groups they are most likely still in out-perform mode.

Hey, throw in a few charts, some price targets and a few hundred more words, and this post could have been a chargeable newsletter... A lucky day for blog readers I guess. Oh well, there ain't no such thing as a free lunch, but a free dinner is a dime a dozen.