The Bull is Back!
Filed Under (Financial News) by admin on 16-09-2009
Yes, the stimulator of the stock-market is back! I believe we are in the early stages of a new bull market. Even with all the bad news still on the table, this bull is showing some sturdy legs.
Supporting my view is the�200 day moving average chart, a technical tactics followed by many market�professionals.�(Click on link�at article end to�see the chart)�
It’s a picture of the S&P 500 over the trailing 10 year period. The choppy green line is the price line of the S&P 500, the solid orange line is the 10 month moving average. (I’ve simply converted the 200 day moving average to 10 months for clarity.
Note the solid line turning up in late 2003, when the market went from a soft of just under 800 to its’ top of nearly 1600 in long delayed 2007. Take a look at the same instigating average line all the progression to the right of the chart.
It�has finally moved up after a near free fall from late 2007 to it’s current up position. This to me signals a new bull market, and it’s time to buy. �
But just a minute. This market has had a remarkable run-up since its’ early March lows. The S&P 500 is up 50% since that time. Could we be buying at too high a price at this stage? Are we due, even overdue, for a significant correction? Aren’t we approaching the dangerous time of historical market corrections of seasonably autumn? �
In time Mr. Market will tell us the answers to those questions. �
We have moved cautiously, in stages so far this year. We bought high quality bonds many months ago, and a S&P 500 index fund fund in early March. �
Our plan is to continue to be cautious but at the same time more aggressive. We’ll begin selling our more conservative bond holdings and replace them with more aggressive ones. We did just that recently with the purchase of one emerging market bond fund. �
We’ll likely continue that process by replacing our high quality bond funds with high yield, both municipal and corporate. �
We’ll continue to be patient and as market corrections take place over the next few weeks and months we’ll use those as buying opportunities. We’ll buy domestic and foreign stock positions, both mutual and exchange traded funds. �
If this turns out to be just another lacking lived “bear market rally” we’ll sell based on our protective “stop squandering” points. However much we may believe this is the beginning of a new bull we will always remain vigilant and protect our clients’ assets. �
Having said all of the above it’s worth pointing out this market faces some daunting obstacles. The usual suspects include an extremely weak economy, rising unemployment, yet rising foreclosure numbers and so on. �
One of the more worrisome statistics to me is the decreasing volume of stocks being traded on the major exchanges. It could be the summer doldrums, or it could be a lack of confidence in the longevity of this bull. We shall wait and see.�
Click link below to see chart.
Learn how to manage your investments with a ‘Plan’. Ride the ‘Bull’ and avoid the ‘Bear’. Visit our website @ and subscribe to our free weekly E-Bulletin.
Steve Hood “All Weather” Investor Specialist
LifePlan Advisors, Inc. A Registered Investment Advisory Firm
386 236-9681 Toll Free 888 320-9624
“Your Guide to Lifetime Financial Security and Independence”
29 years of helping our clients and friends meet their retirement goals.
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