4.17.09

4.17.09

          The market experienced some up and down volatility in the midst of options expiration on Friday, but managed another positive close. It was on relatively light volume for an expirations day. The Dow closed basically flat, up just 6 points, or 0.07%. The S&P 500 closed up 0.5%. The NASDAQ closed up 0.2%. The Russell 2000 closed up 1.2%. And the DJ Transportation Avg closed up 1.1%.

          For the week: The rally continued for its 6th straight week. But like the previous week it did run out of some of the steam seen in the previous four weeks. Gold’s decline continued.

          The most important happening of the week however was the Volatility Index (VIX) closed below 35 after hitting a high of 80+ back in November. This is the index that measures the market risk. The higher the number, the higher the risk. We like to see it below 30. When it is in that range, it makes for a more predictable market.

          The problem we have to face now is this: It has been a “bull run in a bear market” for the last six weeks which means it is due for a correction or a resumption of the downward path. When we see this happening, we will take the appropriate action. We are still going to keep our powder dry with 100% in cash. A signal change could be in the offing soon but let’s be a little more patient before we jump back in.

Till next time

The MTA Staff