I am treating yesterday's Market action as a gift
Steve Cook on Disciplined Investing


Have You Seen This?


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Have You Seen This?


   This Week’s Data

    September factory orders dropped 2.5% versus expectations of a .5% decline and August’s -4.0% report.

    The International Council of Shopping Centers reported weekly sales of major retailers up .6% versus the prior week and up .9% versus the comparable period in 2007; Redbook Research reported month to date retail chain store sales up .3% on an annualized basis, an historically weak level.


    More on economic inequality:

    Libor rates continue to improve (fall):

    Update on credit crisis indicators:



  International War Against Radical Islam

The Market

    Chart on new highs versus new lows:


    What a great day.  The Averages (DJIA 9625, S&P 1005) closed up big on the day, though both remain within a trading range (DJIA 7853--9707; S&P 839--1062).  The S&P also manage to close above a previous mid October high that the DJIA left behind a week ago.  The volatility index fell a lot again, though it is still high (47); and volume finally picked up a bit.

    Other positives include: (1) another day absent a late day margin call driven sell off and (2) another day that greeted the Market with disappointing economic statistics [see above] yet stocks rose in spite of it.

    To be sure the positives are just that; but rather than persuading me to buy, they just raise my confidence that the 10/10 lows marked the bottom of this latest down cycle.  I am not flinching (at least not yet) from my opinion that the Market will trade in a range until we get more data on the length and depth of the current down turn.  I may be wrong about the boundaries of that trading range but for the moment I think that the oft repeated parameters listed above are a good operating model.

    So with yesterday’s bounce, I want to scale back further on those holdings that have really spiked in this latest up move--and I am going to.  However, because our Portfolios are already at their maximum cash position (25%) under our current strategy, the funds received from those sales will be reinvested into holdings that have remained above their 10/10 lows, have made higher lows but have lagged or performed in line with the Market in general. 

Posted 11-05-2008 8:26 AM by Steve Cook
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