June 30, 2009: Halftime for 2009
June 30th, 2009
So now what?
Q2 just ended and while it was certainly a strong three months, Q2’s gains merely erased the declines of Q1 for the Dow 30, S&P 500 and Ru 2000. Year-to-date, those indexes are: -3.75%, +1.78%, and +1.77%, respectively.
NAZ 100 is operating in a whole different realm with a 21.92% gain for the year so far. Thirteen names in the index have year-to-date gains of over 50%.
Looking at just the month of June for the S&P sectors, the extreme performers were Utilities with a 5.11% gain and Materials with a 4.89% loss. Year-to-date, there are only three sectors with gains; Technology (+24.08%), Materials (+12.28%), and Consumer Discretionary (+7.52).
Investors have been making increasingly concentrated bets on Technology-related names. Maybe that aggressive behavior is based on a hope that government bailouts will extend into the Technology sector to “assist” in mergers. Maybe investors are simply fishing in low-dollar stock waters because once a low-priced stock starts showing persistent buying interest, that stock lights up on screens of quant and algorithm-based traders and positive momentum REALLY kicks into gear.
While “the crowd” is rushing into technology, we would strongly urge selling into that euphoria.
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