Don't get your feathers ruffled with the headline news surrounding the markets. I think that this is a very strong market to be long right now. As told from Warren Buffet's 13F filing with the SEC, he is a supporter of QE2 and a bull on the market. His outstanding reputation might only be surpassed by his exceptional long-term investing record. To put it bluntly, if he is running with the bulls in Pamplona, you bet I am there hopefully a few strides ahead of the next guy.
The 30-day correlation coefficient between the 10-year Treasury yields and the S&P hit -.42. Stocks and bonds are not moving together anymore after reaching a high .89 in June. This is a major sign that investors are valuing companies based on their earnings and profit projections rather than the overall economy that has been scaring investors for the past couple of years. From the beginning of the third quarter to the end of the next year's third quarter of a President's third year in office, the Dow has averaged 15.5% since 1896. With the correlation coefficient so low, stock's performance reliant on earnings reports and financial results, and analysts forecasting 87% of S&P companies are going to have higher earnings next year, the market looks strong.
And for a Thanksgiving Week sendoff, a few statistics for the week historically:
59% of Thanksgiving weeks have the Dow higher
The Dow has fallen 3 of the last 4 Thanksgiving weeks
The Dow averages .59% gain
Enjoy the holiday and as always *preserve your capital*!
Very Interesting, thanks for the update
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