Market summary 4/9/09 and going forward

I thought you might be interested in the updated chart I had shown on 3-23-09 of the Dow Industrial Average. As you will notice in the chart above, there is no doubt we have moved up into the upper range off the recent market bottom. We broke the Red downtrend line as you can easily see. The volume was very good on Friday and we closed at the high of the day. This may carry us into early next week with some positive momentum. We closed at 8,083 on the Dow and the chart looks good for a gain going forward. Whether we go to above 9,000 will be totally based upon the news and how the stimulus is perceived to be working and how the banks are doing. Wells Fargo's earnings of $3 Billion profit for the quarter definitely sparked this market rise, but Wells is one of the more secure and sound banks. We still need to hear next week from Bank of America and I don't see it doing as well as Wells. Nor do I see Citigroup doing as well either. But if they don't do as bad as expectations they could drive the market much higher on their news.

My Bank Index shares did well on Friday, symbol FAS, climbing 40.7% to $8.71/share. It is Direxion's Financial Bull x3 shares which is a Triple play. In December, these shares were between $20-30/share.

Those who had purchased Apple shares when I did at $83/share have seen these shares rise to almost $120/share and those who purchased and still own Ford when I bought mine at $1.70/share have seen there shares rise to $4.24/share. These are huge gains.

I still own these two ETF's, the first being TNA, which closed on Friday at $23.16/share and the other SSO, closed at $22.90/share. I see both of these ETF's continuing their rise. If they seem to stall and you are concerned that your gains might be lost, consider buying TZA as it is an Ultra Short Triple play and it can be used as a good hedge if the market reverses. But do not buy it until you see TNA starting to reverse course. Watch the charts and not only Price but Volume as well. I would only buy those shares for a short period of time until the market direction is clear again and consider it an insurance policy.

If the market continues to rise there will be something to consider. That being, when to sell. I suspect some who sell soon, will be faced with either wishing they hadn't or buying back the same shares at a higher price. There is nothing wrong with taking a profit, especially if you can see a better stock which will grow at a faster rate. When I sold my Apple shares at $97/share I left about another $20/share or 20% on the table. But by buying FAS, I have seen a faster growth rate. I was just lucky on this, as I could have jumped out too early.

When we are fearful we have memories of the big market drop we have experienced over the past 6 months and don't want to repeat it again. So our tendency will be to sell early or get on the bus too late. That is why I have repeatedly said I believed this rally was for real and that most wouldn't believe it. Many still don't. I do! Do you?