9.11.09

9.11.09

We are just baffled at what is going on in the stock market. Today was yet another day defying all the odds of overbought conditions, seasonal patterns, technical indicators, investor sentiment, warnings of an overdue correction from some very astute analysts, etc.

And no we’re not talking about ourselves, but folks like Sam Stovall, chief investment strategist at Standard & Poor’s, Art Cashin, director of NYSE floor operations for UBS, Mohamed El-Erian, CEO of bond-trading giant PIMCO, Jeremy Grantham, chairman of giant money management firm GMO, Warren Buffett, and on and on, all having sold into the strength weeks ago, expecting a significant correction that has just not taken place. El Erian says this market is on a “sugar high”.

Thursday it was reported that Warren Buffett is down more than 10% just in the last 4 weeks, he must have been playing the short side. And tonight it was reported that The Harvard University Endowment Fund, for many decades by far one of the most successful and profitable managers of money, has lost 27.3% on its investments in the 12 months ended June 30. Highly regarded Sy Harding is down 15% so far this year. These are long-time great investors and money-managers, which all have been looking for a big correction over the past month. Some of them have been playing the short side and have gotten hurt badly.  

Yes, I am telling you this so you won’t think we’re quite as stupid as we may appear to be at times. As we have said over and over again, until the market gets into a mode of predictability, the best place to be is in CASH.

The market again showed strength all day today, then looked like it was going to reverse to the downside mid-afternoon, getting our hopes up, only to see heavy buying come in the final hour  yet again to drive it up to a new rally high, now above 9,600.

We are staying in 100% in Cash.

Till next time

The MTA Staff