By Forrest Lowell

News Flash! The American economy is worth 7% more now than it was 24 hours ago! Of course the economy is not worth more today than yesterday; 20,967 more people are unemployed, thousands more just defaulted on their mortgage, millions of homes went unsold, 10’s of millions of square feet of commercial property continue to be unrented, and the tax payer just lost another trillion dollars. All in all I would say it was a pretty crappy day, unless of course you owned anything with a ticker symbol, then you think today was fantastic. But one needs to ask themselves if anything has changed.

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by Keith

Today we witnessed the continuation of a recent bullish trend in the market. After a fuss over executive compensation, the markets witnessed a nice gain to begin the week. While today, and most likely over the next few weeks, offers opportunities to accrue nice gains, we must be cautious. The obvious questions at the moment are: have we seen if there finally going to be a sustained rally? and have we seen capitulation? Personally I think the answer is no to both, but it is hard to say in these times. The changes in the housing figures released recently make one want to believe things could last, but as always we must be careful. In light of this, I think it is time to remember the importance of separating trades from investments. In bear markets (as with any other market) we have to set metrics for ourselves about what to buy, and when to sell it. One would have done well to view things as trades, and only trades. Making purchases only for the short period of time to time the ebb and flow of this bear market was certainly easier to handle than trying to buy up long term holdings after the first few lows. As this rally continues one must question what to sell and what to hold to test the life of this rally. I would suggest the simple question of whether your holdings are investments or trades, because it is much easier to swallow pulling the trigger too early on trades since we see questionable long-term value to them. While your investments will stir draw your ire should you miss out on a sell, if it is a true investment you will not be upset in the long run. All of this should not be new to anyone, but in this market it does not hurt revisiting your basics.