US Stock Market Seasonality: April Is Best Month Of The Year

According to this research from Bespoke Investment Group, April is the best month of the year for the stock market bulls:

"April has historically been the best month of the year for the market. As shown below, the Dow has averaged a gain of 1.94% in April over the last 50 years. The next best month is December with a gain of 1.52%." in BIG

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY) and ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

Birinyi Increases His S&P 500 Target To 1325

Lazlo Birinyi increased its 2010 target for the S&P 500 to 1325. His firm cited moves within the market that could indicate the economy is better than expected.

Related Etf`s: SPDR S&P 500 ETF (Public, NYSE:SPY) and ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

S&P 500 Index: This Week Has Bullish Seasonality

There seems to be a good seasonality in the week before Easter. Despite being a low volume week, the S&P 500 Index has managed a 1.77% average weeekly return over the last 10 years:

"Going back to 1945, the S&P 500 has been positive nearly two-thirds of the time in the week leading up to Easter for an average gain of 0.56%. The week after Easter has been less positive. On the Monday after Easter, the S&P 500 has averaged a decline of 0.16%, while the week after Easter has seen a paltry average return of 0.03%.

Looking at just the last ten years of returns shows a similar, although more positive trend. In the week before Easter, the S&P 500 has averaged a gain of 1.77% with positive returns 60% of the time. Interestingly, even though most traders are expecting a quiet week, recent history suggests the opposite. In seven out of the last ten years, the S&P 500 has seen a move (up or down) of more than 1%. In the week after Easter, the S&P 500 has averaged gains of 0.72% with positive returns 70% of the time." in BIG

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY)and ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

Should You Average Down?

"Some managers traded stocks, some traded bonds, some used fundamental analysis, and some simply traded throughout the day. But the only single thing the majority of them had in common was that they "scaled-in to positions". When they had conviction in a position, no matter what their style was, they bought more as price dropped.

As you likely know, in most books this is taught as a recipe for disaster. Isn't it taught never to buy more lower? Yes, it is. And who teaches this? Not the best hedge fund managers in the world. These people buy lower, and if given the opportunity, they buy even lower (I remember one 30-year veteran of the industry telling me to buy a stock he liked, and to go home and hope it drops so I could buy more at an even lower price...this man helped create wealth for some of the most successful people in the country for three decades using this exact approach)."

in Oil Trader`s Blog

Bill Gross: Does He Prefer Stock Over Bonds?

Bill Gross gave his outlook for stocks and bonds on CNBC:

"Let's suggest the economy looks good, that risk assets— whether it's high-yield bonds or whether it's stocks—have a decent return relative to the potential of declining bond prices. I'll go with the stock market. All assets to some extent relate to the same conditions—economic growth, the potential for inflation, central bank policy. To the extent that stocks are now basking in a growth revival, more than green shoots, there is a chance that stocks keep going."

Will this bullish comments from the Bond King signal a top in stocks?

Related etf`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS), ProShares UltraShort 20+ Year Trea (ETF) (Public, NYSE:TBT)

Largest Forex Hedge Fund Expects Euro At 1.20 This Summer

The largest forex hedge fund is expecting the euro to trade down to 1.2000 vis-a-vis the US dollar by this summer:

"The problems in Europe are deeper than many suspect. So says the largest Forex hedge fund in the world. John Taylor, chairman and chief executive officer of FX Concepts LLC, says Europe is likely to see some defections from the Euro system and could result in further weakness in the Euro"

This would be very bearish for US commodity related stocks like Alcoa Inc. (Public, NYSE:AA), United States Steel Corporation (Public, NYSE:X), Freeport-McMoRan Copper & Gold Inc. (Public, NYSE:FCX) and Titanium Metals Corporation (Public, NYSE:TIE).

Related etf`s: PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP)

Investment Blogs: The Most Influencial External Influence On Investors

Investors continue to rely more and more on blogs for investment advice. A recent survey shows young investors rely heavily upon the Internet and Investment Blogs to manage their portfolios. The survey shows that:

(1) Turning to the Web: financial websites and blogs were the most influential external influences for both younger investors (49%) and those 40 and older (47%)

(2) More "Do It Yourself" investing: Almost half (49%) of those 40 to 65 have reduced or eliminated their reliance on financial professionals compared to 37% of investors aged 21 – 39

(3) Parents can help: Almost one-third (30%) of the younger group say their parents had the biggest influence in getting them started investing.

There is a handful of great investment blogs. Some of the very best and most popular are: The Pragmatic Capitalist, Bespoke Investment Group, Abnormal Returns, Seeking Alpha and Oil Traders Blog

Have a great trading day.

Best Performing S&P 500 Stocks: Titanium Metals (TIE), E TRADE And Cliffs Natural Resources

The stock market rallied again with all the 12 industry groups closing in positive territory. Today best performers in the S&P 500 Index were Titanium Metals Corporation (Public, NYSE:TIE) +9.3%, E TRADE Financial Corporation (Public, NASDAQ:ETFC) +7.3% and Cliffs Natural Resources Inc (Public, NYSE:CLF) +6.9%.

Barton Biggs: We Can Rally Another 10%

Barton Biggs is still very bullish on stocks and expects this rally to extend another 10%. Biggs, whose flagship hedge fund returned three times the industry average last year, says stocks remain cheap relative to forecast earnings.

The S&P 500 is valued at 14.7 times 2010 profits, assuming earnings for companies in the index rise 27%, the average estimate from analysts tracked by Bloomberg. That compares with an average multiple of 16.6 over the last 56 years. Wall Street firms predict total income at S&P 500 companies will rise 50% in the next two years, the biggest increase since 1994, according to estimates compiled by Bloomberg. "I'm very struck by the level of bearishness everywhere I go," says Biggs, who predicts the next move in the S&P 500 will be a 10% to 15% gain. "I'm not obsessed with history. I'm bullish because I think the global economic recovery is on track and is going to be surprisingly strong. The world was falling apart in 2009. There's been a tremendous change."

Of course Barton Biggs is a perma bull and was bullish all the way down in 2007 and 2008.

Julian Robertson: Obama Is Doing A Terrible Job

Former star hedge fund manager and billionaire Julian Robertson thinks that President Obama is doing a terrible job. Robertson said:

"I've made a pretty good living over the years by never hiring anyone that wasn't a lot smarter than I am. So when I go in a room, I know I'm not the smartest person in the room, not even approaching it. Now Obama, from all I read, thinks that on every occasion that he is the smartest person in the room. And I think he often probably is, but you can't run the biggest business in the world having never run even a country store. And he's running into that and he's just doing an awful job and people see it. He's enough of a politician to see it – although he's so cocky maybe he doesn't see it"

Related etf`s: SPDR S&P 500 ETF (Public, NYSE:SPY), PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP)

Jeremy Siegel: Decoding The Euro Currency

Jeremy Siegel wrote about currency unions on his last weekly column:

"Economists have long maintained that labor mobility and income transfers are a necessary condition to form a successful currency union. These conditions are certainly applicable in the United States, which enjoys unprecedented labor mobility and a dominant federal tax system.

Even if Greece is bailed out, the conditions that brought about the crisis in the peripheral countries are not alleviated. Certainly, the Greek fiscal authorities must enforce tax laws and reduce its burgeoning deficit. But in the short run these measures will just exacerbate the economic slowdown. The alternative, dropping out of the Euro zone and reintroducing a new national currency, is a worse nightmare.

To enter into a currency union is much like getting married without a prenuptial agreement. No one likes to think of the potential problems down the road. But without a pre-planned exit, the breakup will be that much more painful. Greece's problems could be a drag on Europe for years to come."

Jeremy Siegel is a Professor of Finance at the Wharton School of the University of Pennsylvania in Philadelphia. Siegel comments extensively on the economy and financial markets and he appears regularly on networks such CNN, CNBC and NPR, and writes regular columns for Kiplinger's Personal Finance and Yahoo! Finance.

Stephen Roach:America Has The Biggest Shortfall Of National Savings

Stephen Roach, chairman of Morgan Stanley Asia, criticized Paul Krugman’s comments that the U.S. should consider a 25% surcharge on Chinese goods, Roach said:

"They don’t want to look in the mirror. America doesn’t have a China problem. It really has a savings problem. America has the biggest shortfall of national savings of any leading country in modern history. And when you don’t have savings you have to run current account deficits to import surplus savings from abroad and run massive trade deficits to attract the capital. Last year America ran trade deficits with over 90 - that’s right nine zero - countries. … Isn’t it the height of hypocrisy that America can articulate a particular position in its currency but the Chinese are not allowed to do that."

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), iShares FTSE/Xinhua China 25 Index (ETF) (Public, NYSE:FXI), PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP), PowerShares Gld Drg Haltr USX China(ETF) (Public, NYSE:PGJ)

Robert Shiller: The Market May Be In Trouble Again

Robert Shiller expressed recently his concerns about market valuations that could lead to another downleg in the stock market:

"Robert Shiller, the Yale economist who famously predicted the 2000-02 stock crash, says the market may be in trouble once more. Stocks already are overvalued, he says. And a renewed housing slump could send the market tumbling. "I wonder about a return to another break in the market," he recently told The Wall Street Journal."
in the Daily Crux

On the economic front he predicts a slow recovery, "The more plausible, bad scenario is not a double dip but just a very slow recovery where the unemployment rate comes down but only over years".

Robert Shiller is an American economist, academic, and best-selling author. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance, Yale School of Management. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was Vice President of the American Economic Association in 2005, and President of the Eastern Economic Association for 2006-2007. He is also the founder and chief economist of the investment management firm MacroMarkets LLC.

Most Overbought Stocks On The S&P 500 Index

If you think the market is a bit overextended and are looking for some stocks to short this is probably a good list for you to analyse:

"Below we highlight the S&P 500 stocks that are trading the farthest above their 50-days. Typically the most overbought names on the list will be about 10-15% above their 50-days, but at the moment their are 33 stocks in the index with readings of more than 15%. As shown, Cliffs Natural Resources (CLF) is currently the most overbought name in the index at 28.18% above its 50-day. Smith International (SII), AIG, and Abercrombie & Fitch (ANF) aren't far behind. These three stocks are all trading more than 25% above their 50-days. Other notables on the overbought list include Ford (F), Macy's (M), and Citigroup (C) (which are all one-ticker names as well)." in Bespoke Investment Group

I would probably start looking at the consumer discretionary stocks. They had a nice run and are probably the most fragile stocks at the moment.

For instance Ford (F) has been on Jim Chanos short list for a long time. Its probably 30 to 40% higher than when he picked it as a shorting candidate.

Very Little Upside: 85% Of Stocks Above Their 50 Day Moving Averages

According to this research piece provided by Bespoke Investment Group it seems there is very little room for a continuation of the rally in the S&P 500:

"The most recent push higher by the market has put the percentage of S&P 500 stocks above their 50-day moving averages at 85%. As shown below, at these levels, there really hasn't been much more room to run on the upside before a short-term pullback (or at least sideways trading) has been seen."

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

The S&P 500 Index Tracker Rallies For The 13th Consecutive Trading Session. A New Record.

The SPDR S&P 500 ETF (Public, NYSE:SPY) rallied for the 13th consecutive trading session. That is a record:

"The S&P 500 tracking ETF (SPY) finished the day up 0.8% today, bringing its current streak of consecutive up days to 13. This is now SPY's longest winning streak since the ETF started trading back in 1993. Over this 13 day winning streak, SPY has rallied over 5%, bringing the ETF to new bull market highs. Looking back at the last two weeks of trading, it looks like those who argued that February's weak Consumer Confidence marked the end of the bull market and the beginning of a double dip may now have to go back to the drawing board." in Bespoke

The million dollar question is, when will this stock market madness end?

Meredith Whitney: Housing Market Will Double Dip

According to Meredith Whitney, CEO of Meredith Whitney Advisory Group, the US housing market will face another dip while mortgage-backed securities and Treasuries are likely to face a material correction:

"The housing market surely will double dip.(...) The Fed has been supporting the housing market, a third of the Fed's balance sheet is tied to mortgages"

Whitney said that Government programs to support housing have been murky and when they come to an end, a lot of supply may come to the market and that's when the real-estate market is likely to go down.

Meredith Whitney also commented credit availability,

"I don't think there's much the Fed can do to get banks to start lending again. That's a structural problem, the model is broken"

Related stocks: Bank of America Corporation (Public, NYSE:BAC), Citigroup Inc. (Public, NYSE:C), Wells Fargo & Company (Public, NYSE:WFC), Huntington Bancshares Incorporated (Public, NASDAQ:HBAN), JPMorgan Chase & Co. (Public, NYSE:JPM), U.S. Bancorp (Public, NYSE:USB), KeyCorp (Public, NYSE:KEY) and Fifth Third Bancorp (Public, NASDAQ:FITB)

Best Online Trading Platforms

Barron`s rated the online trading platforms according to several parameters:

"Although Barron's names a No. 1 broker, that doesn't mean it's the right pick for your style of investing, so we also name leaders in four other categories -- long-term investing, options trading, international investing and high-frequency trading. We also display the lowest- and highest-cost brokers for those who trade a few times a month or several times a day." in Barron`s

I am an Interactive Brokers user and fan. This is what Barron`s wrote about IB:

"Pros: It still leads the pack in access to global markets, with access to bourses in 17 countries on five continents, and cost-consciousness. Consulting outfit Transaction Auditing Group showed that IB customers enjoyed quite a bit of price improvement -- a 31-cent advantage per 100 shares and 21-cent advantage per options contract -- compared with the industry average over the second half of 2009. Its trading platform, Traders WorkStation, was enhanced with added portfolio analysis and risk-management tools, plus expanded access to real-time streaming news. Short sellers can tap a wide array of items, and customers can now trade in multiple currencies as well. Education offerings are wide-ranging and well-written. The mobile applications are very usable and offer streaming data.

Cons: Although improved, TWS is still not an intuitive platform to use. The learning curve is steep. This is a broker more geared toward professional traders, so buy-and-hold investors should steer clear."

Related Stocks: Interactive Brokers Group, Inc. (Public, NASDAQ:IBKR), E TRADE Financial Corporation (Public, NASDAQ:ETFC), TD Ameritrade Holding Corp. (Public, NASDAQ:AMTD), TradeStation Group, Inc. (Public, NASDAQ:TRAD), optionsXpress Holdings, Inc. (Public, NASDAQ:OXPS)

Market Sentiment Dangerously Bullish Among Retail Investors

Market sentiment among retail investors is dangerously high. We had a similar reading in January, when the markets peaked:

"According to the AAII weekly survey of retail investor sentiment this week we had 45.29% bulls and 25.29% bears. The last time we saw a similar posture was in mid January 2010 (see that week’s sentiment overview for details). Although, the AAII was even more lopsided, with more than 2.14 bulls for every bear, at the start of the year."

in Traders Narrative

Related Etf`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

MarK Mobius: China And Stock Picks

Mark Mobius, president of Templeton Emerging Markets commented the state of the chinese economy while speaking to the Reuters Mining and Steel Summit:

"High levels of growth in China are sustainable, but it will get harder and harder as the economy grows. You cannot expect double-digit growth rates over the longer term but you can achieve high single digit growth."

And Mobius highlighted the impact of the chinese growth on commodities:

"The implications for raw material are great. China has become quite active and aggressive in seeking out raw materials globally. Here in Africa they have a number of big projects. They are in Latin America as well. They are spreading out and seeking places where they can get raw materials to feed their economy."

Even though, Mobius sees premature actions from the central bank as a potential problem:

"A big spurt in inflation and central banks acting too quickly would mean you have a little problem"

His has also mentioned a few stock picks:

"That's why we have companies like PetroChina Company Limited (ADR) (Public, NYSE:PTR). The other way is to buy companies overseas like Vale (ADR) (Public, NYSE:VALE), which is a major exporter to China from Brazil and get exposure that way. Compania de Minas Buenaventura SA (ADR) (Public, NYSE:BVN) in Peru is one that exports gold and copper all over the place. Antofagasta plc (ADR) (Public, OTC:ANFGY), which is based in Chile but listed in London is another one and don't forget the Russians. They have the wherewithal and resources to supply China with a lot of raw materials."

Related ETF`s: iShares MSCI Emerging Markets Indx (ETF) (Public, NYSE:EEM), Market Vector Russia ETF Trust (Public, NYSE:RSX), iShares FTSE/Xinhua China 25 Index (ETF) (Public, NYSE:FXI), iShares MSCI Brazil Index (ETF) (Public, NYSE:EWZ)

Marc Faber: Bullish On Japan

Dr. Marc Faber told Yahoo Finance there's very few opportunities to make money in the market right now. Faber, however, is confident we won't "see 666 on the S&P 500 ever again." He says "if we go down by 10-20% on the S&P 500, our money printer Ben Bernanke will flood the market, weakening the dollar," and thereby driving up stock prices.

If you are going to put money to work in stocks he thinks Japan is the place to be. After a 20 year bear market and despite high-debt-to-GDP levels, he thinks the market has become too cheap to ignore. Always a contrarian, Faber believes the lack of interest in Japanese stocks makes it one of the most compelling buys in the world.

Related ETF`s: ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS), iShares MSCI Japan Index (ETF) (Public, NYSE:EWJ), SPDR S&P 500 ETF (Public, NYSE:SPY)

SPY`s Up 10 Days In A Row. Is This An Apotheotic Top In Stocks?

The SPDR S&P 500 ETF (Public, NYSE:SPY) is up for 10 days in a row. Bepsoke picked up on that and found that the only 10 days winning streak in the history of the S&P 500 ETF tracker happened in 1995:

"While the S&P 500 is up in nine of the last ten days, the ETF that tracks the index (SPY) is now up ten days in a row. Since SPY started trading back in 1993, there has only been one other period where the ETF was up more than ten straight days. That streak came in September 1995, when SPY had twelve straight up days in a row." in Bespoke

Is this the apotheotic top of the stock market?

Rally Keeps Gaining Momentum. Is This A Rational Move?

This is the best description of the recent rally in US stocks that I have found in written form:

"The rally that began 4 weeks ago continues to gather momentum. The market closed at the highs of the day with a 0.4% gain. Volume was moderate and breadth was positive at 1.5:1. The impressive stats just continue to pile on top of one another. The S&P is now back at the January high and is up 9 of the last 10 sessions. Bank stocks have risen 21 of the last 24 sessions and are now up 10 sessions in a row. The VIX fell for the first time in 3 days, but also extended its impressive momentum to the downside with its 18th down day in the last 22. It’s hard to say that this hasn’t been the absolutely most impressive part of the entire rally since last March. It has been on little to no news, very low volume, but is relentless in its push higher as sentiment surges to a very bullish positions. Whether this is a rational move or not is irrelevant." in the Pragmatic Capitalist

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

Warren Buffett: Famous Quote

"If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."

Warren Buffett

Wilbur Ross: Bullish On Insurance Stocks

Wilbur Ross mentioned recently his bullishness on insurance stocks:

"There are deep value opportunities in insurance stocks, which were beaten down because of their exposure to the subprime crisis, annuities, and commercial real estate. I won’t name names, but some well-managed life insurance and fire and casualty companies will come through this stronger. They used to trade at one or two times book value but now trade at three-quarters book" Wilbur Ross, Fortune

Related stocks in life insurance: Prudential Financial, Inc. (Public, NYSE:PRU), Lincoln National Corporation (Public, NYSE:LNC), MetLife, Inc. (Public, NYSE:MET) and Conseco, Inc. (Public, NYSE:CNO).

Financials Up 9 Days In A Row: Time To Sell Short?

Bespoke Investment Group highlighted in their website that the financials are up for 9 consecutive days:

"The S&P 500 Financial sector rose once again today, making it nine up days in a row for a total rally of 6%. Since 1990, there have only been two other periods where the sector rallied for nine straight days. In each of those prior periods, the streak ended at nine days. In 1995, the index followed up the nine-day winning streak with a six-day losing streak, while in 1997, the sector declined in four out of the next six trading days." in Bespoke

Odds favor a short play in Financial Select Sector SPDR (ETF) (Public, NYSE:XLF) or in Direxion Daily Finan. Bull 3X Shs(ETF) (Public, NYSE:FAS) the leveraged financials ETF.

Some of the stocks that have rallied the most on the sector are SunTrust Banks, Inc. (Public, NYSE:STI) up 16% in the last 10 days, followed by Huntington Bancshares Incorporated (Public, NASDAQ:HBAN) up 9%. The big banks, Citigroup Inc. (Public, NYSE:C), Goldman Sachs Group, Inc. (Public, NYSE:GS), JPMorgan Chase & Co. (Public, NYSE:JPM), Bank of America Corporation (Public, NYSE:BAC) and Wells Fargo & Company (Public, NYSE:WFC) are all up between 7 and 8 percent during the last 10 days.

Natural Gas Seasonality: Time To Buy

This is a seasonal chart of the Natural Gas Futures price. Despite the bearish comments on the Street about the excess supply of Natural Gas and the bearish price outlook (several analysts are predicting a 4.00 dollars in the next few weeks) this is actually on the strongests periods for Natural Gas. The period between early march and late April is a very bullish period for natural gas.

This move can be played through Natural Gas futures, via the natural gas ETF, United States Natural Gas Fund, LP (Public, NYSE:UNG) or buying some natural gas sensitive stocks like Chesapeake Energy Corporation (Public, NYSE:CHK), Devon Energy Corporation (Public, NYSE:DVN), SandRidge Energy Inc. (Public, NYSE:SD) or Delta Petroleum Corp. (Public, NASDAQ:DPTR).

Natural gas has everything fundamentally going for it right now. It is cheap, it is domestic and it is plentiful. So while crude hovers above $80 a barrel, natural gas still trades at under $4.50 per mmbtu. That's an incredible 18-to-1 ratio, well over the more historically traditional six-to-10 times differential. So we know that natty is cheap. With recently discovered Marcellus and Texas shale deposits and new injection technologies to get at them, the U.S. has become the "Saudi Arabia of natural gas," with well over 100 years of new supply now waiting to be tapped. So we know it is plentiful and domestic.

So, even if Washington has been slow to recognize natural gas as the cornerstone of a new national energy plan, corporate America has been far less slow to recognize the obvious. Exxon Mobil(XOM) was first, paying $41 billion, an incredible premium, for XTO Energy(XTO). Then Total, the French energy giant, ponied up $2.25 billion for a quarter stake of Chesapeake's(CHK) Texas shale fields. Last week, BP(BP) paid a smaller amount to acquire a one-half stake of Lewis Energy's Texas shale holdings. And that has been followed by this most recent Arrow Energy deal offer from Shell and PetroChina.

Bob Doll: The Recovery Is Real

Bob Doll says the recovery is the real deal and that you better jump on board the risk asset train before you get left behind. He says the March 2009 lows are here to stay and the withdrawal of government stimulus will actually prove the recovery to be quite real. This is a transcript of his market newslwtter:

“In our view, March 2009 marked the primary low for this bear market. We are a year past that now and, barring a significant double dip in the economy, the odds point to 2010 as a positive year for equities and other risk assets. Some argue that the recovery process is artificial, mainly reflecting the impact of government intervention, and that the economy’s day of reckoning will come as stimulus is withdrawn. Skepticism about the durability of a recovery is common following recessions, especially after a severe one, but recent history suggests that the world economy almost always adapts and returns to growth. Minus any significant negative external shocks, we believe this recovery should follow suit.”

Probably even more surprising are his comments about the US job market:

“In fact, we would argue that the second quarter could bring as many as 300,000 new jobs given that the average work week, temporary hiring, productivity and profits—four leading indicators of job growth—have all moved up.”

Bob Doll is the Chief Equity Strategist at BlackRock.

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

US Equity Funds Have The Lowest Cash Levels On Record. A Bear Market Is Nearby.

Fund managers have been so afraid of missing any stock market rally that they have run down their cash holdings to 3.6% of assets from nearly 6% a year ago. This is the largest decline in 19 years, meaning that equity cash ratios are back to where they were in September 2007, just as the stock market was hitting its peak.

And you can add to this worrysome figure the ultra bullish sentiment among US stock market Newsletters,

“Based on the several hundred investment advisers I track, I’d have to say that bullish sentiment is approaching dangerously high levels. Consider the Hulbert Stock Newsletter Sentiment Index (HSNSI), which represents the average recommended stock market exposure among a subset of short term stock market timers tracked by the Hulbert Financial Digest.

It currently stands at 62.8%, up from 13.8% just one month ago. That’s an awfully big jump for so short a period of time, especially considering that the Dow Jones Industrial Average rose a modest 4.4% over this period." Mark Hulbert

With no cash to further fuel this rally an important stock market top will be formed in the next few days, weeks.

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS), ProShares UltraShort DJ-UBS Crude Oi ETF (Public, NYSE:SCO) and ProShares Ultra QQQ (ETF) (Public, NYSE:QLD)

Small Speculators Continue To Bet On The Short Side

According to the CFTC, small speculators continue to bet on the short side of the market:

"There was very little change this week in the S&P 500’s commitment of traders report. Small speculators reduced their short positions marginally, but remain heavily net short. As a contrarian indicator this report continues to spell potentially bad news for the bears. The small speculators have missed the entirety of the March 2009 rally as institutions have increased their bullish positions. We continue to see small speculators on the other side of this trade." in the Pragmatic Capitalist

This is the only piece of the puzzle that does not point to a severe stock market correction. Small speculators actions are an important stock market barometer and this indicator is pointing for higher prices. (read: US Stocks: No More Fuel For The Rally)

Related RTF`s: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS)

US Stocks: No More Fuel For The Rally

Equity mutual funds leaving are holding the smallest cash reserves since 2007 in a sign that gains for the Standard & Poor’s 500 Index may slow. Cash dropped to 3.6% of assets from 5.7% in January 2009, leaving managers with 172 billion USD in the quickest decrease since 1991. The last time stock managers held such a small proportion was September 2007, a month before the S&P 500 began a 57% drop.

“It’s not a red light, but it’s a flashing yellow light that the strongest part of the rally is probably over,” said Jerome Dodson, who oversees 3.6 billion dollars as president of Parnassus in San Francisco.

The percentage of cash held by funds suggests that you want to be wary of who’s left to do the buying.

Related ETF`s: SPDR SP 500 (ETF) (SPY), ProShares UltraShort SP500 (ETF) (SDS)

Stephen Roach: 40 Percent Chance Of A Double Dip

Stephen Roach, Asia chairman of Morgan Stanley commented the unemployment data and the prospects for the US economy:

"The official unemployment rate at 9.7 percent is distorted downwards by at least 3 million people who have simply given up looking for work and who have effectively taken themselves out of the work force for economic reasons. For some bizarre reason, the statisticians do not count these poor souls as unemployed. If you add them back in, the unemployment rate isn't 9.7 percent. It's 11.5 percent"


Stephen Roach cautioned investors that hiring may not come that quickly as businesses are still nervous about demand prospects:

"The idea that we can get some spontaneous revival in employment and capex when the consumer is under serious trouble, to me, is really missing a key analytical point to take away from this tough post-crisis climate."

Roach pointed out that the american consumer is still in trouble and we could even be looking for a double dip in the economy with a 40 percent chance:

"The American consumer is in serious trouble given the unemployment, the debt, the low savings, and the lack of income growth. That's a key reason to look for a double-dip. The demand side is going to be very impaired by the U.S. consumer and there's no other consumer that is going to fill the void"

Related ETF`s: SPDR SP 500 (ETF) (SPY), ProShares UltraShort SP500 (ETF) (SDS)

The Best Energy Stock In The Russell 3000 Index

McMoRan Exploration Co. (NYSE:MMR) is the best energy stock in the Russell 3000 in 2010. McMoRan Exploration Co. (NYSE:MMR) is up an astonishing 131% and is the second best performer overall in the Russell 3000 Index.

As we mentioned earlier in the week, Boone Pickens also has a large position in McMoRan Exploration (MMR) in his hedge fund, BP Capital.

The Russell 3,000 is up 2.7 percent year to date, but the average stock in the index is up 6.9%.

Boeing (BA) Is The Best Dow Performer YTD

Boeing (BA) is up 25.5 percent year-to-date, while Bank of America (BAC) the second best performer is well behind with a gain of 11 percent. Home Depot (HD), Travelers (TRV), General Electric (GE), Kraft Foods (KFT), Cisco (CSCO), and Procter & Gamble (PG) are the other names in the Dow up more than 5%.

The worst performer in the Dow Jones Industrials is Alcoa (AA) with a decline of 14 percent, while AT&T and Verizon are down 11% and 12% respectively. The average Dow stock is up 1.5 percent year to date, and 18 of the 30 members are currently in the plus column for 2010.

Boone Pickens: The US Needs To Use More Natural Gas

Boone Pickens stated that the United States will make a monumental mistake if it doesn't utilize one of its most prevalent energy resources, natural gas. Boone Pickens said:

"You've got 4,000 trillion cubic feet of natural gas—that makes us number one in the world. We're going to be fools, we'll be identified as the dumbest people in the world if we don't capitalize on this resource and replace OPEC oil."

Pickens said one of the most simple ways to introduce natural gas to the automobile business is to make it the primary option for larger transportation vehicles,

"What you do is go after the 8 million 18-wheelers, and when a new 18-wheeler is purchased it will go to domestic fuel, which would be natural gas. If we had those we would cut OPEC in half."

T. Boone Pickens cited AT&T (T) as a company that's using natural gas as the energy source for its automobile fleet.

Related stocks and ETF`s: United States Natural Gas Fund, LP (Public, NYSE:UNG), SandRidge Energy (SD), Chesapeake Energy (CHK), Southwestern Energy Company (NYSE:SWN), Delta Petroleum (DPTR)

Marc Faber: Gold Will Continue To Outperform Paper Currencies

Marc Faber thinks that gold will continue to outperform paper currencies, arguing that gold supply can`t increase as fast as central banks print new money:

“Gold's quantity cannot increase at the same rate as you can print money, which will eventually weaken the US dollar. I’m not saying that the dollar will go straight away down because other currencies like the euro are even worse at the present time. But eventually if you print money, the purchasing power will lose value." in CNBC

Dr. Faber even added that investors should buy some gold every month forever, accumulating the precious metal periodically in small amounts.

Related stocks and ETF`s: SPDR Gold Trust (ETF) (GLD), Market Vectors Gold Miners (ETF) (GDX), Newmont Mining Corporation (NYSE:NEM), Goldcorp Inc. (USA) (NYSE:GG), Novagold (NG)

Chinese Premier Wen Warns Of Latent Risks In Banks

Premier Wen Jiabao warned of “latent risk” in China’s banks and pledged to crack down on property speculation in a speech in Beijing to the National People’s Congress, similar to the U.S. State of the Union address.

The chinese government faces the consequences of flooding the economy with money to drive growth and also faces excess capacity in manufacturing and weak support for rural-income growth:

“The domestic economy still faces some prominent problems” and he added “Latent risks in the banking and public-finance sectors are increasing”

Harvard University Professor Kenneth Rogoff has said growth could slide to 2% from Wen’s 8% target within the next 10 years as a debt-fueled bubble collapses, and Victor Shih of Northwestern University sees risk of a crisis in 2012.

These concerns are also expressed by hedge fund manager Jim Chanos, and international investor and market commentator Marc Faber. Former John Paulson’s right hand man at Paulson and Co., Paolo Pellegrini also has some concerns about the chinese real estate as he recently wrote, “I was in China late last year. One particularly enlightening meeting was with the top official of a major bank, who pointed to all the empty office buildings surrounding his own, observing that his country’s stimulus money would have been better spent paying people to stay home”

Related stocks and ETF`s: iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI) , China Mobile Ltd. (ADR) (NYSE:CHL) , China Life Insurance Company Ltd. (ADR) (NYSE:LFC)

David Rosenberg: The Market Is Topping

Gluskin Sheff`s market strategist thinks the market looks toppy, displaying many characteristics of the 2007 market highs:

“The S&P 500 has basically been hovering around the 1,100 threshold since October 15, getting as low as 1,042 and as high as 1,150 in what can only be described as a tight 10% band. (As an aside, the 13 week rate of change for the S&P 500 has swung to negative territory.) It has split the time above and below the line almost perfectly evenly as well (52% above, 48% below). We can understand the emotions involved in such a prolonged sideways band — a down move to 1,080 triggers calls for a correction, while moves up back to 1,120 prompts calls for a new high coming around the corner.”

Rosenberg adds that a prolonged sideways price consolidation is bearish on a secular bear market:

“In a secular bull market, a six-month trading range can be viewed as a pause that refreshes. But in a secular bear market, it more than likely reflects a classic topping formation, as was the case in the spring and summer of 2007 when the S&P 500 also flirted with the 1,500 mark for as long a period as it has hovered around the 1,100 threshold since last fall. Keep in mind that similar to 2007, we are starting to see some fraying around the edges in the latest set of economic data releases — jobless claims, housing starts and sales, core goods orders and shipments, construction, ISM and consumer confidence.”

David Rosenberg is Gluskin Sheff`s Chief Economist & Strategist with a focus on providing a top-down perspective to the Firm’s investment process and Asset Mix Committee. Mr. Rosenberg received both a Bachelor of Arts and Masters of Arts degree in Economics from the University of Toronto. Prior to joining Gluskin Sheff in 2009, Mr. Rosenberg was Chief North American Economist at Bank of America-Merrill Lynch in New York and prior thereto, he was a Senior Economist at BMO Nesbitt Burns and Bank of Nova Scotia. Mr. Rosenberg has ranked first in economics in the Brendan Wood International Survey for Canada for the past seven years.

Related ETF`s: SPDR SP 500 (ETF) (SPY), ProShares UltraShort SP500 (ETF) (SDS)

Boone Pickens Stock Picks In The Energy Sector

Boone Pickens manages the BP Capital hedge fund that invests primarily in the energy sector. These are his top stock picks:

"Pickens' main hedge fund is BP Capital, and we checked the firm's most recent 13F to see what Pickens is holding these days. Below we highlight Pickens' stock holdings as of the end of 2009. As shown, the biggest investment in the fund is currently Transocean (RIG), which represents 12% of total equity holdings. Hess Corp (HES) is the second largest holding and is the only other position that makes up more than 10% of the portfolio. Pickens also has a large position in McMoRan Exploration (MMR), which has been one of the best performing stocks out there in 2010 (+125%). The worst performing stocks in Pickens' portfolio so far this year have been Suncor (SU), Foster Wheeler (FWLT), and Sandridge (SD)."

Thomas Boone Pickens, Jr. (born May 22, 1928), known as T. Boone Pickens, is an American financier who chairs the hedge fund BP Capital Management. He was a well-known takeover operator and corporate raider during the 1980s. With an estimated current net worth of about $3 billion, he is ranked by Forbes as the 117th-richest person in America and ranked 369th in the world.

60 Stocks Made New 52 Week Highs On The S&P 500

More than 40 stocks in the S&P 500 are trading at least 10 percent above their 50-day moving averages and many stocks in the index are now breaking out. Actually, 60 stocks in the S&P 500 have hit new 52-week highs yesterday.

Many of the stocks making new 52 week highs are on the technology space. Names as Agilent Technologies Inc. (NYSE:A), Akamai Technologies, Inc. (NASDAQ:AKAM), Altera Corporation (NASDAQ:ALTR) and JDS Uniphase Corporation (NASDAQ:JDSU) are on the list.

Financials are less represented with only a few names as Cincinnati Financial Corporation (NASDAQ:CINF). In the healthcare space, Biogen Idec Inc. (NASDAQ:BIIB), Celgene Corporation (NASDAQ:CELG), Intuitive Surgical, Inc. (NASDAQ:ISRG) and Cardinal Health, Inc. (NYSE:CAH) are among the strongest.

Small Speculators Are Bearish (CFTC). The Stock Market Will Move Higher.

The small speculators have been constantly on the wrong side of the market. They are positioned for a drop in prices, small speculators in the S&P 500 have now reached their largest net short position of 2010 and their largest short position since early December of 2009. This probably means that we will have another upleg in the market:

"Short sellers haven’t been able to catch a break in this market. While institutions continue to allocate capital to equities (see here), small speculators continue to bet against the market. Over the last few weeks the shorts have dug their heels in. As the market turned lower small speculators have become increasingly net short. According to the CFTC’s Commitment of Traders report small speculators in the S&P 500 have now reached their largest net short position of 2010 and their largest short position since early December of 2009. These traders have been on the wrong side of the trade since the very beginning of the rally and this data could be further contrarian evidence that supports a bullish outlook for the markets." in The Pragmatic Capitalist

Related ETF`s: SPDR SP 500 (ETF) (SPY) , ProShares UltraShort SP500 (ETF) (SDS)

Mark Mobius: Bullish On India

Emerging markets specialist, Mark Mobius said today that India`s stocks will outperform other emerging markets. The main reason for his market call are the improving fundamentals of the Indian economy:

"India’s shares may “outpace” other emerging markets as the country’s economy strengthens, investor Mark Mobius said in comments about the four biggest developing nations known as the BRICs.

“India’s macroeconomic fundamentals have significantly improved,” Mobius, who manages $34 billion in developing-nation assets at Templeton Asset Management Ltd., said in a question and answer interview posted on the company’s Web site yesterday." in Bloomberg

Related ETF`s: iShares MSCI Emerging Markets Indx (ETF) (EEM) , PowerShares India Portfolio (ETF)

Top Hedge Fund Manager: Short US Fixed Income, Short US Equities And Buy Commodities

Paolo Pellegrini, before founding his own hedge fund PSQR was John Paulson’s right hand man at Paulson and Co. In a recent letter to shareholders he said that the structural problems that precipitated the Great Recession around the globe remain unresolved.

Making a long thesis short, he thinks we are essentially papering over the problems with more debt while China adds more exports to a saturated market. Thus far the massive stimulus has been successful in jumpstarting the global economy, but is nothing more than a temporary respite from the longer-term structural problems that remain.

So, Paolo Pellegrini’s favorite trades in 2010 are to short US fixed income, short US stocks, short the US Dollar and buy commodities.

In terms of equities Pellegrini says valuations are becoming stretched as organic growth fails to match expectations. He also believes higher taxes could ultimately be a net negative for equities.

He joins Jim Chanos and Marc Faber saying that China is one of the greatest risks to the recovery. He added, “I was in China late last year. One particularly enlightening meeting was with the top official of a major bank, who pointed to all the empty office buildings surrounding his own, observing that his country’s stimulus money would have been better spent paying people to stay home”

In the US, Pellegrini says that the end of the stimulus and the Fed’s programs will mark an economic top in Q1 2010 and set the stage for economic weakness in the latter half of 2010.

Related ETF`s: SPDR SP 500 (ETF) (SPY), ishares FTSE/Xinhua China 25 Index (ETF)(FXI), SPDR Gold Trust (ETF) (GLD)

Dennis Gartman: The Euro Is Doomed And Technicians Saw It First

Dennis Gartman spoke to Hard Assets Investors recently and made some very bearish comments on the euro currency:

"For all intents, I think the euro is doomed. There were many who said they didn't think the euro would make it past the first important recession. Well, this is really the first important recession since the creation of the euro. And I've been surprised it has lasted as long as it has. Honestly, I think the euro is a doomed currency."

Dennis Gartman notes that the reversal was in November of last year, and that the technicians saw it first:

"I think the turning point was in late November of last year. That's when I think the market began to understand that there were problems coming. What was important was that the technicians saw it first. The euro broke its uptrend that had extended back for 18 or 20 months. Now we understand why it broke."

Peter Lynch: Stocks Are The Place To Be

Peter Lynch, 66, the legendary fund manager that run the Fidelity Magellan Fund with spectacular sucess, gave an interview to Globes where he discussed his outlook for stocks:

"The past decade is one decade out of a hundred years in which in which we have known the markets. We started at an extraordinary peak in the stock market as a result of the sharp rises in 1999, but in a sense the past decade was the lost decade on the stock market mainly because stocks were overvalued"

Interestingly enough, Lynch said that nobody can predict the stock market in any given year:

"I will tell you the same thing I would have said 10 or 20 years ago as well. To predict the market`s direction in any given year is a completely random act. You can`t know what the markets will do in a period of 6 to 12 months"

When asked about what is important trait for making money in the stock market, Lynch added,

"The most important organ in the body as far as the stock market is concerned is the guts, not the head. The stock market looks to the future and nor to the past. The tendency of people to run when the situation is bad and go in only when it is good is a good formula for losing money"

Lynch is bullish on stocks for the next 10, 20 and 100 years, "I think it will be a good place to be in 10, 20 and even 100 years to come".

Today Peter Lynch is a research consultant at Fidelity Investments.

Related ETF`s: SPDR SP 500 (ETF) (SPY), ProShares UltraShort SP500 (ETF) (SDS)