Dr. Kris'  Instablog

4:00pm ET: The market maintained yesterday's status quo as both Wall Street and Main Street checked out early. The major averages ended the day higher with the notable exception of the Dow Transport Index (DTX). Being a leader of market direction makes this a cause for concern but the fact that it hung in there and the VIX was able to back off of yesterday's advance is encouraging. Perhaps the past week's consolidation was just the fuel needed to stoke a further rally but the P/E multiple of just under 18 on the S&P 500 is becoming rather rich.

Next week is chock full of economic landmines including the revised GDP figure on Thursday and personal income, Chicago PMI, and Michigan consumer sentiment numbers on Friday. These could be very telling as to how the Fed may react in the next few months. Numbers indicating growth could actually be bad for the equity market as this might prompt a Fed change in stance from dovish to hawkish (meaning an earlier than anticipated end to quantitative easing and a rise in bond yields).

Considering the frothy nature of the market coupled with these economic landmines, what's an investor to do right now? I do believe that a VIX close above 15 would justify buying some protection and should the VIX continue to advance, then getting into bear funds would make fiscal sense.

That's it for now. I, too, am bugging out early for the weekend. Have a good and safe one and please do take a moment between flipping burgers to remember those in our armed forces who have courageously fought for our freedoms over the course of this country's history. A 21 gun salute to all of you!

Subscriber Notes: There is one very exciting Stock of the Day--do make time to check this one out!

3pm ET: Market Alert!: The "Sell in May" scenario may be kicking in!
Today's dramatic rise in the VIX and corresponding dramatic drop in the major averages lead by the DTX (a leader in market direction) could spell the end of the current rally. Long-term investors may wish to buy protective puts while traders should consider booking profits. Should the VIX close over 15, swing traders and bears may wish to initiate short positions or take positions in the levered bear etfs.

Here are some of the more popular 3x levered bear funds along with current approximate share price and today's percentage gains: Short Dow30 (SDOW, $40, +0.5%); Short S&P500 (SPXU, $23, +1.4%) and (SPXS, $10, +1.6%); Short Russell 2000 (small-cap stocks) (SRTY, $20, +3.8%) and (TZA, $32, +3.8%). These are all higher risk plays so please monitor them closely and set a mental stop-loss before you initiate a position. More conservative investors can use the unlevered total bear market fund (TOTS, $26, +1%). While the bears are playing, the bulls should be busy building their shopping lists for when the market turns around. Let's hope that's soon!

Subscriber Notes: There are no new entries as I'm waiting to see in which direction the market decides it wants to move.

4:00pm ET: Well, the major averages managed to hang in there to makr this the nineteenth successive Tuesday where they are closed in the green. However, the market leading Transport Index (DTX) was the noticeable laggard and the fact that the Trin and the VIX are both rising could spell timeout for the market in the near-term. Tomorrow, the ears of everyone on Wall Street will be pinned to Bernanke's testimony before Congress listening for any shred of a change in monetary policy. Market tone will be guided by the testimony and could either be very quiet or very volatile, depending on what's being said. Could be a profitable day for the day traders or a good one to sleep in. In remembrance of testimonies past, I might just do the latter.

Today's Market Highlights: Marine shippers on the move
The Guggenheim Shipping etf (SEA, $18) gapped out of a five month trading range yesterday on over four times normal volume. Not only did it handily break near-term resistance at $17.50, it also took out long-term resistance at $18. This etf is used as a proxy for the famed Baltic Dry Index which is viewed by economists as a leading indicator of future production and economic growth. The SEA has lagged the overall transportation index (the IYT is an etf proxy for this index) but it appears as if it's now trying to play catch-up. The shippers in particular have suffered much more than their land-based peers and investors are trying to rectify this situation.

Today's biggest movers were Genco Shipping (GNK, $2.10) and Frontline (FRO, $2.46). Both of these gained 17% and 12% respectively as investors piled in. Perhaps not so coincidentally, these two names are also the ones that saw the biggest drops in share value since their 2010 highs, down over 90% from their peak values. Although they're showing signs of life, they do face some near-term resistance--for Genco that's at $2.50 and for Frontline it's in the $2.75 to $3.00 range. A break above those levels could mean clear sailing for a while.

While Genco and Frontline appear poised for growth, they are not major holdings of the SEA. The fund's biggest holdings are foreign-based companies such as Maersk (16%) and several others which only trade on foreign exchanges. US exchange traded members include Navios Maritime and Teekay Tankers, both of which have more than one trading entity. For example, Teekay is listed under Teekay Corp (TK), Teekay Offshore (TOO), Teekay Tanker (TNK), and Teekay LNG (TGP). These are different businesses under the same corporate umbrella and detailing their differences is the subject of another article. My point today is just to alert you to the potential growth opportunity in this unloved industry group.