Fri 9/30/11, 4:17 PM – Poor End to a Bad Quarter

Nobody was happy this quarter, only those sitting on the sidelines. Traders, investors, speculators, mutual fund managers, hedge fund managers – everyone hated the quarter. Even bonds had a bad September and gold pulled back sharply the last few weeks. Only the dollar ended the quarter well.

The 1040 level on the S&P 500 which had held repeated re-tests, finally gave way as the index finished at 1132. The closing low for the year is 1120 and the intraday low is 1101.

The market usually does well at the start of new quarters as new money comes in. Also, temporarily good news could come out of Europe in the next week or so. The 4th quarter is historically the best one but sometimes the first 2-3 weeks can have a selling climax. For that reason, there have been some memorable Octobers. We’ll see.

One group that did hold up well was high yield stocks. Europe now yields 5% on average and the top ten yielding Dow stocks average 4%. That is where I expect to concentrate this coming quarter.

Today’s #s

S&P 500 – -2.5%
DJIA -2.0%
Sml Stocks -2.8%
Europe -1.5%

Gold 0.24%
Oil -2.0%
Food -3.5%
Bonds Up
Dollar 1.0%