Investor's (H)Edge: Will the Bulls Keep Running or Retreat?
Sleeping Well Whether the Bulls Run or Retreat
by David Brown, Chief Market Strategist, Sabrient
The market outlook is much like it was last week, with the added trauma of another earthquake in Japan. QE2 money continues to flood the market, and low interest rates continue to drive money out of bonds into equities. Short sellers are still covering. Our economy is still recovering, boosted last week by slightly lower-than-expected initial jobless claims. Corporate America is still flush with cash and high on earnings.
Technically, the market remains strong, despite closing down slightly today. The S&P 500 closed at 1,333.51, down -0.15%.. It is still well above its 50-day moving average but still slightly below its 3-1/2 year high. As we noted in our Monday newsletter (What the Market Wants), the S&P 600 Small-cap Index closed at 448.08 on Friday, which was not only a pre-recession high but an all-time closing high, topping the previous high of 444.90 set on July 13, 2007.
The bulls may be in charge, but we never really know whether they’ll continue to run or beat a retreat. That’s the beauty of having a balanced portfolio like Investor’s (H)Edge. We can sleep well at night regardless of where the market might go.
Portfolio Review
This week we are reviewing long position Jabil Circuit, Inc. (NYSE: JBL) and short position The Ryland Group, Inc. (NYSE: RYL).
Click here to learn more about the Investor’s (H)Edge Portfolio.
Full disclosure: The author does not personally hold any of the stocks mentioned in this week’s Investor’s (H)Edge.
Disclaimer: This newsletter is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their own financial circumstances in acting on any stock selection made by Sabrient. Sabrient makes no representations that the techniques used in these reports will result in or guarantee profits in trading. Trading involves risk, including possible loss of principal and other losses, and past performance is no indication of future results.