Market Brief: Monday, October 25, 2010

At Friday's close, the S&P 500 had moved up 15.7% from it's low point in July.  The S&P Mid-Cap Index and NASDAQ Composite have both advanced 18.6%, and it has all happened as investors were being seduced by 0.2% T-Bills and CDs.

It is very comforting to see the Dow Transports leading the way.  If it isn't leading, you always have doubts that some BIG trouble lies out there somewhere.

The last 16 weeks have been quite profitable, especially if you used that correction in May and June to fine tune your portfolios.  In the last 3-4 weeks, we've been biding our time, since we have had some moderation in our Psychology Composite and overbought oscillators.  But the total message from our Asset Allocation Matrix still stands-maintain maximum bullishness to stocks and minimum to bonds and cash.

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Don Hays

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