Seeking Advice

Tuesday Outlook: Commodities, Global Markets

Dave, I didn't expect to hear from you for a while. I appreciate you keeping the charts and analysis going given all the distractions (putting it mildly, I suppose) in your life, right now.

So many of the charts seem so synchronized. Makes diversification a more difficult task. I started investing in individual stocks in the late 90s (thuoght I was pretty smart) then went to buy-and-hold indexing after getting smashed by the early 2000s. But index investing diversification has often meant a mix of U.S. large, mid and small caps plus maybe 20% international stocks (plus some bonds and cash). That's been considered sufficient in the past. However, If everything continues to be fairly synchronized, index investors will have to look to expand into these other ETFs like USL, UNG, DBA. Of course, these can be far more volatile and not all that suited to buy-and-hold.

Wednesday Outlook: Commodities, Global Markets

So, Dave, do we just give up on fundamentals? Can 'we' just keep talking up the economy and the markets go up... indefinitely? Can we remain on the top side of the overbough/oversold chart indefinitely and not have any significant correction? I would love to believe the the 'all clear' bell has rung but I fail to see what's changed. Unemployment is high and likely to continue higher as there's no catalyst for that to change. Wages aren't going to increase in this environment. Home prices are declining and foreclosures remain severly elevated.

Personal debt also remains high and people still have to save more to make up for their lower home values and smaller 401(k)'s, neither of which are likely to leap up to their former trejectory.

I fail to see how we can just jump back to where things were. The way things were was/is part of the problem, it was demonstrated to be an unsustainable model. I admit being confused but still holding stocks, albeit at a little lower percentage.

Thursday Outlook: Commodities, Emerging Markets

Your comments on the IYT chart are spot on. I'm not a short seller but agree that many of the people who complain that short sellers cheer "bad news" will probably cheer the news that UAL intends to lay off 1500 Flight Attendants. That's a 'positive' cost saving business story, right? Certainly helps to put things in perspective. As Barry Ritholtz (another blogger) often says, "there are two sides to every trade".