The Technical Factors seem to be improving
Steve Cook on Disciplined Investing

Syndication

Have You Seen This?

News

  • Make money by accessing all our Portfolios, the supporting research and Price Disciplines using our paid subscription blog, Strategic Stock Invetments. Our work is focused on making money for our Portfolios not as some academic exercise in Internet investing. Check our performance (audited)--our Dividend Growth Portfolio has beaten the S&P by 500 basis points per year for the last seven years but with a beta of only .62. (Mandatory Disclaimer: past performance is not a guarantee of future results.) We give you everything you need to duplicate our results, in particular, a strict price discipline for both Buying and Selling.

Have You Seen This?



Economics

   This Week’s Data

    Weekly mortgage applications fell 4.5%.

    Weekly jobless claims fell 21,000 versus expectations of an 18,000 decline.  Some observers had expected a terrible number.
   
   Other

    Growing concern over investment protectionism:
    http://www.american.com/archive/2008/december-12-08/beware-of-investment-protectionism

    The dollar--the downside to the Fed’s new policy:
    http://bespokeinvest.typepad.com/bespoke/2008/12/biggest-6day-decline-for-the-dollar-ever.html

    Crisis and the size of government:
    http://gregmankiw.blogspot.com/2008/12/crises-and-government.html

Politics

  Domestic

  International War Against Radical Islam

The Market
    
    Technical Fundamental

    Inflation and retirement:
    http://www.ritholtz.com/blog/2008/12/the-inflation-factor/

    An update on the ‘4 Bear Markets’ chart:
    http://www.calculatedriskblog.com/2008/12/four-bad-bears-update.html

**************************************

    The Averages (DJIA 8824, S&P 904) traded in a fairly tight range yesterday and closed between the short term support (circa DJIA 8782, S&P 893) and resistance (circa DJIA 8996, 913) levels. Perhaps more importantly, the volatility index continued its plunge below that November to present uptrend line that I have been focused on of late.  As I noted previously, a decisive break below that support line should be a positive for stock prices.  Finally, after reviewing the daily charts of all the stocks in our Universes, it looks like equities in general performed much more positively than the indices. 

    Two more positive indicators:
    http://bespokeinvest.typepad.com/bespoke/2008/12/sp-500-breadth-levels-turn-positive.html
    http://bespokeinvest.typepad.com/bespoke/2008/12/more-on-the-sp-500s-50dma.html

All that said, the lack of follow through by the Averages after Tuesday’s major changes in Fed policy which were demonstrably designed to improve financial market conditions is bothersome to me. I have noted several times in the last couple of weeks that when stocks go up on bad news, that is a positive.  Unfortunately, the reverse is also true.  So while my bias is still that stocks will trade higher near term, I am going to be very sensitive (i.e. a willingness to take money off the table) to any decline below the November to present up trend line.





Posted 12-18-2008 8:36 AM by Steve Cook
Filed under: