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In This Issue:

Rally off and running again...
Leaders on hold
Earnings still in the tank
Home prices still falling but sales off the lows
Next weekly newsletter June 14...

Quote of the week
"There's consternation in the stock market. If we see a pick-up in long-term yields, an economic recovery will be much more difficult. That concern could be enough to halt the recent stock rally."
- Russ Koesterich Barclays Global Investors, San Francisco

Rally off and running again...
Stocks rallied strongly on Tuesday following the Memorial Day holiday based on a strong showing in the Conference Board's consumer confidence indicator which is interesting - we have found this metric to be of little trading value. However, investors chose to ignore the most recent Case-Shiller home price index that showed home prices continue falling at an accelerating rate....

In This Issue:

Rally blasts up...
Leaders fall behind...
An earnings-deficient recovery?
Construction spending, ISM and jobs improve
Last hurrah, then seven lean years?
Elliott Wave SPX Perspective

Quote of the week
"In the U.S., the total market value of housing, commercial real estate, and stocks was about $50 trillion at the peak and fell below $30 trillion at the low.  The original $50 trillion of perceived wealth supported $25 trillion of debt.  This loss of $20-$23 trillion of perceived wealth in the U.S. alone is still enough to deliver a life-changing shock for hundreds of millions of people." 
- Jeremy Grantham in the GMO Quarterly Newsletter May 2009

Rally blasts up...
This rally re-ignited to finish its ninth week of gains pushing the S&P500 up 36% from its March 6 low. More interesting perhaps is the fact that the SPX is showing its first gains for 2009. And stocks are even more overbought than there were last week....

In This Issue:

Rally six weeks old...
Leaders down... no there back up again...
Earnings, still not real signs of improvement
Treasury sales still falling, so are housing permits and starts

Quote of the week
"Anyone who is doing anything sensible right now is either losing money or is out of the market entirely," Quant trader "who is seeing something scary in the capital markets" in article by Tyler Durham.

Rally now six weeks young...
This rally marked its sixth-week birthday this week. Since hitting its low in the first week of March, the S&P500 is up 28% with Financials leading the pack. But that being said, this and most other major indexes are getting really stretched (overbought) and 89% of the stocks in the SPX index are above their 50-day moving averages (DMA), which is the highest level since mid-2006 according to Bespoke. Last week we mentioned that the index was 8% above its 50-DMA and that extended to 9.6% this week. Another challenge that faces stocks this week is that major indexes are getting close to bumping up against key resistance areas that taken together with how overbought stocks are across the board, increases the chances for a correction....

In This Issue:

Rally still going...
Leaders lagging
The new earnings season kicks off
Case-Shiller index implies worst home price declines may be over
Economic metrics also leveling
We're still in sell mode

Quote of the week
'Investors are still heavily in cash and the challenge they are facing is how to scale back into growth-oriented investments. For that reason, technology leadership is not surprising given many are flush with cash and little debt,' - David Kreinces, a portfolio manager with ETF Portfolio Management.

Rally still going...
It was another good week for the bulls. As Dan explained this week from his Miami home, there is a lot of cash on the sidelines looking to get into the market. Despite the fact that we are still bear market, cash doesn't do much good if it isn't working which is why this rally has been so explosive But the fact that pundits like Jim Cramer are so confident that a new bull market has begun is a bearish omen. At true market bottoms, the majority including the Jim Cramers of the world, have given up, and this is most certainly not the case now.

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IN THIS ISSUE:

Stocks sink deeper in economic quick sand...
Leaders point higher
Earnings just keep falling...
And so do housing markets
New billionaire buy & hold blues band - Warren and the Prince

Quote of the week
"When governments come knocking, investors run out the back door." - Bespoke Investment Group in a newsletter this week.

Stocks sink deeper in nationalization quick-sand
Stocks sank for their third consecutive week of across the board losses for the major indexes as more key support levels were broken and both the Dow Industrial Average and S&P500 put in twelve-year lows. Should anyone not have known how the market would view increasing intrusions by governments into the nation's board rooms, we got another demonstration of just how unpalatable the "N" word is to investors. This is not surprising since we are seeing the greatest (and most troubling) efforts to socialize free markets and companies since the FDR approach during the Great Depression.

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