Playing the bear market rally

July 30, 2008

The recent slump in the market occurred rapidly and indicates oversold conditions. My preferred method of monitoring — and acting on changes in — momentum in the market is the Stock Market Momentum Indicator (SMMI), as constructed and calculated by CRB. I had been anticipating a signal and it finally appeared after yesterday’s close.

The last time this indicator flashed a buy signal was on August 31 of last year. I wrote about the signal at the time and gave my reasons for taking action cautiously. In short, the market was still near peak levels, a credit crunch was starting and the economy seemed to be heading towards a recession. The caution was warranted, as the signal, which closed on May 29, turned out to be the only unprofitable such signal since the indicator’s inception in 1994. Read the rest of this entry »

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Investing in Africa

July 3, 2008

As discussed in my last post, getting exposure to the markets’ least developed economies is hard to do with exchange-traded funds. The African continent seems to garner only slightly more investor interest than Antarctica and that interest has thus far mostly been focused on Africa’s most developed countries. Read the rest of this entry »