Market Commentary: 11/30/09

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Coppock Curve

It's the end of the month and the Coppock Curve isn't holding back. The index rose 65 points from October giving no sign of false buying indicator. At this point, I assumed that the uptrend should continue on. Once again, the Coppock Curve or indication doesn't tell us when to sell. It is a "buy only" indicator but I can extract some more useful information from this indicator. Since August 1932, the average duration between buying signal are 58 months. Secular bull market will have a duration longer than 100 months. Excluding the secular bull market, I have a figure of 46 months average. Adding 46 months to May 2009 and you end up with March 2013. This is purely statistic or a simple guess! May be March 2013 will be another time to buy.

Market

Despite some bad news about Dubai, the Dow continued to move higher. The ability for the market to disregard bad news is an encouraging sign but the high valuation got me wonder how far can this continue. With the major index paying dividend less than 10 years treasury (3%), one has to understand that the market has priced in tremendous amount of growth in the economy. The Industrial uptrend is clear but the Transport could be the joker. At this point, it's all about wait and see.

As for myself, I continue to search for value while acknowledging the market over bought condition. A new company on the radar is Hershey (HSY) the chocolate maker. No extensive analysis is done but I love chocolate so I have to look at it.

Wal-Mart (WMT) went up like a rocket over the past month so I expect some pull back. Look for $52 dollar range to be support. That price range will yield 2% in dividend.

If you want to buy something, make sure it is a good value to you. Analyst use discounted cash flow model to price equity. Small investor such as myself should utilize the same model but to price how much you are willing to pay for a stock. This analysis comes in the form of dividend. Right now I am long PNY, WMT, WEYS, and PPDI. Average yield of 2.80%.

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