Market Musings 2007 09 27

MARKETS
Markets continue on solid uptrend with the leading stocks on a faster path up.
And, as a defensive investor, we must tighten out stops, if market turns south.

End of the quarter window dressing is in full swing, with Friday being the end of quarter. So, it is probable that the upswing in market leaders is caused by Hedge Funds...(Cramer).

SPY is at 152.80 and watch for levels 152.1 and 151.6. These are technically significant.But technical indicators are just that. Mental markers for some market participants.

WHAT TO DO
Do not forget to move up the stops on market leaders like AAPL, GRMN, RIMM and others... Playing defense is more important than increasing market leverage.

Best regards...

Market Musing 2007 09 24

Market Action today was positive in the morning and then whimpered out in the afternoon. There is a lot of overhead resistance from people who purchased just before the sub prime mess.

So, if the news for this week implies that economy is slowing down, please be ready for some down drafts in the market....

BIG GREEN FLAG only if market goes through the recent highs on convincing volume. The material stocks will remain volatile. Demand for mobile smart phones will keep the AAPL and RIMM making new highs, unless the next earnings report for RIMM due 10/4 will does not meet the high high expectations of market participants...

SO, HOLD ON and watch the markets ebbs and flows...

Market Musings 2007 09 19

UNCLE Fed came through to provide liquidity to the market makers and banks to loan money to hedge funds in trouble.

STOCK MARKETS are looking good. We will be reducing our short positions today and hope to close these out today.

RIMM and GRMN did well yesterday, making new highs, while AAPL was somewhat weak. The market indicators like DIA, SPY, IWM, SMH, QQQQ broke through some resistance and these are safely above them. We can expect to see new highs in next few weeks.

XLF...Financial Sector has snapped back, but, a lot more damage will come to light as time passes.

To make money, one must stay flexible and accept the judgment of other market participants who are bigger than you. Ego has no place.

Money....

Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.
Groucho Marx

How true... The only problem is that Groucho Marx kept his money under his mattress. For most people, we can not choose to keep our money in 3 month treasury bills.

We all are trying to grow our money against the ravages of inflation. And, hopefully, grow it at a rate which will allow us to retire early and avoid doing anything we dislike.

So, what do we do....Keep going to your day job and keep saving for future rainy day...

Most important investing goal is not to lose money in the market, i.e. playing defense first, by placing stop loss orders on each stock/position you purchase.

Also, money is not everything....Suze Orman, the new age money guru, who is doing a religious crusade against the CREDIT CARD debt, says....

PEOPLE FIRST, then MONEY and then THINGS....

This is so important to keep one healthy in so many ways. Keeping up with Joneses should be a low priority. As this makes us buy THINGS, which at the end of day is a low priority activity.

Best regards.....

Market Musing 2007 09 15

All of us are happy that 09 11 2007 passed without any significant incident. The markets remain mixed at best with a very limited upside.

Markets
The technical condition of market is mixed with leading stocks as represented by IBD 100 still not making new highs and not any better that larger caps. The current volume is lower than when the sub prime mess hit the markets. Next Tuesday's Fed action would result in market going lower and this is widely expected, so, in a perverse way market may go up.

We will have to wait for some time, may be weeks, before we see a clear direction, i.e. averages trending up.

Recommendations
--Maintain healthy cash positions.
--Hedge positions by purchasing ETF's that correlate negatively with SPY, DIA and QQQQ.
--Purchase/maintain positions in leading stocks like AAPL, RIMM, GRMN and ADRs from BRIC regions.

Market Musings 09 11 2007

Today is an unfortunate anniversary of 9/11/2001. World was never a perfect place to live. And, it never will be. There have been groups of people all over the world that do not believe in values that plural democracies share willingly.

Should we erase them from the face of the world or should we learn to live with them, with minimal erosion of our own values ? This is a question, whose answers will divide us for a long time.

Educating them is the simple answer. Killing them from the face of the earth is not, if we still wish to go to STARBUCKS in the morning for a double shot of corrosive caffeine.

Markets...
The MARKETS look horrible. The highest possible reward for buying is DJI at 14000, even if federal reserve cuts the interest rates. The clear path for markets is to go down.

So, you can keep cash. Money market funds are yielding north of 4%. Or buy some ETF's like DOG that will go up, as Dow Jones Index falls.

Recommendation...

---Learn to take losses. They stop bleeding and pain on wrong positions.

---Reduce market exposure.

---Buy negatively correlated ETF's like DOG etc.

Looking forward to cooler weather in Houston, as October rolls around.