D&D Note (4-2-2012) ~ 10th Straight Quarterly Start With a Gain

D&D Note (4-2-2012)

The American Manufacturing report (ISM) came in better than expected at 53.4 — up from 52.4 last month. This – as the news pendants would say – fueled today’s rally. In reality this is the 10th quarter in a row that started the first day of trading with a healthy gain.

Sometimes its amazing to me how the news networks and media come up with reasons why the market fell or gained on any certain day. Sure sometimes there is a catalyst but many times its as simple as the market wants to go up or the market wants to go down. And by want I mean the computers that drive 75% of the daily trading are… doing just that – driving the daily trading. And moving on crazy things like the “Mood of Twitter.”

Expect Light Volume leading up to Easter Weekend. And so far this year the market has shown that it will gradually rise up with this light volume. The key In April will be whether we get a down catalyst like Iran or if we get an up catalyst like continued good earnings or money on the sidelines finally joining the party.

Last year the market hit its high on April 28th.

April of this year should see the topping pattern before a pullback – but unlink last years flat average of extreme volatility through the last half of the year, we should see another continuation of the bull market after June of this year – or at least by September when we on historical basis always see a FED easing and rally begin – whereas in May we historically see a FED tightening and a selloff. Hence, the term Sell in May And Go Away (until September when you jump back in).

So in other words after we see a correction in April we should see money on the sidelines join back into the market and see another upward trend of at least 7.5% (but we could see a correction of 9.5%).

Groupon, the internet coupon company, continues plunge. This was never an investment grade stock. The accounting errors they have make them look like a Chinese internet IPO.

World markets also gained today with all three American Indexes up on first day of threading in Q2.

Bonds yields still remain extremely low, as in why would you buy them now, with 10 year at 2.18%.