05-06-2011

Friday, May 6, 2011

WHACKING THE BULLS

After last week’s strong rally, it was time for the bears to show some muscle and pull the major indexes back into reality territory. After 4 days of selling, euphoria about today’s better than expected jobs report pulled the market out of the doldrums via a sharp opening upside spike.

I am not sure if this was a partial dead cat bounce, but sentiment changed in a hurry on news reports that Greece may abandon the European Union and create its own currency. That took the starch out of the upward momentum and, while we ended up closing in plus territory, we came way off the highs for the day.

Yesterday’s selling pushed one our holdings, the commodities index (DBC), below its trailing sell stop by a slight margin. As is my custom, I watched the market open this morning with DBC making a nice rebound. Upward momentum faded as the session progressed, and I ended up liquidating this position before it headed further south again. None of our other holdings were affected by this past week’s market slide.

Employment growth provided the initial boost with payrolls growing by 244,000, which was far better than the consensus range of 185,000 to 200,000. However, the unemployment rate inched up from 8.9% to 9%.

Gold rebounded today, but crude oil and silver continued to slide with oil having lost 14.7% this week, while silver gave back 27.4%. Interest rates rose along with the dollar index.

Our Trend Tracking Indexes (TTIs) pulled back a little from last Friday’s close but remain in bullish territory by the following percentages:

Domestic TTTI: +4.76% (last week +5.98%)

International TTI: +4.72% (last week +7.10%)

While the better than expected unemployment report took center stage, worries persisted about Thursday’s disappointing jobless claims report, which may affect the jobs picture in May or June.

As a result, and absent any major negative events, we may see the market trade in sideways pattern until a better picture about the true economic strength, or lack thereof, emerges.

Have a great week.

Ulli…

————————————————————-

 

Back issues of the Fund Tracker are available on the web at:

http://www.successful-investment.com/newsletter-archive.php

Do you have a question regarding your mutual fund investments?

I will always give you my unbiased and honest opinion. How can you be sure?

First, this is a free newsletter and it will not affect my renewal rates.

Second, I am not running for office and do not have to hide my thoughts in evasive language designed to obscure what I really mean.

So, feel free to send your questions to: ulli@successful-investment.com

All Reader Q & A’s for this Buy Cycle are now listed at our web site! Check it out at:

http://www.successful-investment.com/q&a.php

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

http://www.successful-investment.com/money_management.htm

We are located at:

18685 A-Main Street, #606

Huntington Beach, CA 92648

Until next week.

Ulli…

=============================

Ulli G. Niemann

Registered Investment Advisor

714.841.5804

http://www.successful-investment.com

=============================

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
This entry was posted in Newsletter Archives. Bookmark the permalink.

Comments are closed.