Up trend or Trading Range--Still Waiting for Direction
Steve Cook on Disciplined Investing


Have You Seen This?


  • 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?


   This Week’s Data

    The International Council of Shopping Centers reported monthly sales of major retailers declined 0.6% versus the prior week but rose 0.6% on a year over year basis; Redbook Research reported month to date retail chain store sales fell 0.3% versus the similar period in April and decreased slightly versus the comparable timeframe in 2008.

    May vehicle sales reported unchanged from April versus expectations of a slight increase; still the year over year numbers remain ugly:

    Weekly mortgage applications rose 4.3%--a welcome change.


    More thoughts on GM (this from the NY Times no less):


    Update on the Baltic Dry Index:

    Some ‘green shoots’ in housing:

    Another opinion view of those ‘green shoots’:

    The latest from Bill Gross:



  International War Against Radical Islam

The Market

    Chart on oil:


    The indices (DJIA 8740, S&P 944) piddled yesterday which is not bad given the strength of the prior two trading days. The S&P remains right on the January high resistance level (947) while the DJIA is well below its comparable level (9078).  Both are selling above the lower boundary of the re-set uptrend off the March lows (DJIA 8335, S&P 900). 

As I said in yesterday’s Morning Call, the issues right now are (1) whether stocks are in a trading range or an uptrend--I am inclined toward the former (2) and if the former, is the lower boundary of the trading range S&P 666 [March low] or S&P 876 [the February high-turned-support level].   


    It was relatively quiet yesterday.  Two items worth mentioning:

(1)    the financials (AXP, JPM, MS) continue to raise more equity.  The headlines read that this is all in order to repay TARP funds.  Whether or not this is the case, I think that the important takeaway is that the banks continue to repair their devastated balance sheets thereby lessening the probability that the financial system implodes and the economy goes off the cliff.

(2)    As I am sure you know, our Treasury Secretary is in China.  It is worth noting what he didn’t say, which is, that China is manipulating its currency [a campaign theme of Obama] which hopefully means we will get less of the anti-China protectionist rhetoric out of Congress.  Of course, just maybe the reason for making nice is related to something he did say:

please don’t stop buying US Treasury bonds and we promise to get our deficit spending under control.  Two words: yeah, right.

Posted 06-03-2009 8:28 AM by Steve Cook
Filed under: ,