An Easter Basket of Stocks

This week's trading ended a day early and with strong action marking the 5^th consecutive week of gains.  U.S. stock markets will be closed tomorrow for Good Friday. 

While I still have doubts about the sustainability of the current market advance, several characteristics offer enough evidence of near term strength for me to start putting some money to work in new stock investments.  I find market observation a fascinating activity; a few of the characteristics in this rally that led me to make new investments include the following:

• Investment Grade & Below Investment Grade Corporate Bond Yields Continue To Narrow 
• Leading Economic Indicators Continue To Stabilize
• Market Technical's Have Improved
• Some Individual Stock Leadership Is Developing
• Stock Market Prices Are At 2003 Levels

I would not be surprised if we come back from the Good Friday & Easter weekend to a lull or even a pullback in the current advance.  Another correction to March lows or beyond is still a real possibility.  There are plenty of reasons to wonder if this rally is for real, but the farther we move from recent lows the less likely we are to hit them again, in my opinion.

Regarding broad stock market analysis, all votes are ultimately cast in daily buying and selling.  Despite what a reporter, analyst or economist says, you can tell what investors are actually doing by how the market behaves.  Today we had another big price advance on strong volume, a trend that started with the advance that began on March 10^th.  By my count, here's the ratio of daily price advances versus declines on above average volume since the rally kicked of March 10^th (23 Trading Days):

• NYSE                      10:2
• NASDAQ                   8:2
• S&P 500                  10:3
• DJ 30                        9:3

My new investments include a broad U.S. index with a concentration in the technology industry, a global dividend index with its largest allocations to Australia, Canada, Sweden & the U.S, which at present are some of the top performing developed countries, and international exposure to emerging markets, another area of strength.

Economic uncertainty remains and volatility could return to the market, but all things considered it appears a reasonably good time to put some cash back to work in global stocks.

I stand ready to deploy additional capital should prices retreat or advance.  I do not expect this market to return to a "bull market" for some time and will continue to use a variety of techniques to generate returns and moderate volatility.  As I deploy more capital in my strategies, it is a good time for new clients to come on board.  If you have thought about using my services in the past, now is an excellent time to let me know.  Happy Easter egg hunting!