A QUARTER DEFINED BY HISTORIC WHIPLASH ON WALL ST. – RSI CHOOSES BONDS AND THE INTERNET March 31, 2009
Posted by Marlowe Cassetti in BSV, HHH, LQD.trackback
Today in the market, Tuesday, March 31, 2009: The first quarter on Wall Street was so extreme it included a bear market and a bull market all its own — moves that sometimes take years or more. Now investors head for spring still unsure which side is in control.
From the second week of the year to early March, the Dow Jones industrial average lost more than a quarter of its value, plunging from just above 9,000 to below 6,550. Retirement accounts were suddenly worth half what they were in 2007.
Then came a rally that left investors’ heads spinning. Over just 13 trading days, the Dow soared 21 percent, bouncing back almost to 8,000.
When the dust settled, the stock market was left with its sixth straight quarter of declines, the first time that’s happened since 1969 and 1970. For the Dow, it was the worst start to the year since 1939. (headline & commentary courtesy of AP via Yahoo Finance)
ETF/CEF Low Volatility:
- BSV – Vanguard Short-Term Bond
ETF/CEF Medium Volatility:
- LQD – iShares iBoxx Investment Grade Corporate Bond Fund
ETF/CEF High Volatility:
- HHH – Internet Holders
ETF/CEF Discussion: As the headlines points out, this was quite a volatile quarter. Glad it has passed, but what of the future? Who knows? RSI is taking a conservative bent and has picked only three funds today. They are probably safe bets. The HHH ETF trades on low volume so be warned. The charts some some interesting price behavior. BSV holds short term US Treasury Notes and its chart reflects a low volatility price action. It pays a 2.94% yield. LQD holds corporate bonds and its price chart reflects the ups and downs of the corporate stock market and it yields 6.20% yield. Both these charts look to me as having good upside potential. The Internet fund is following a classic technical chart pattern of higher highs and higher lows. To market technicians this is magical, although I would add that the light volume sheds a bit of worry on its case.
I don’t have much more to say except I hope you weathered through this past quarter well and I hope you are prepared for another exciting quarter ahead.
Catch you tomorrow.
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