This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Large and in Charge

The past few months have been a great time to be part of the markets. Hardly a day goes by without some longstanding Wall Street record being broken.

Whether it's how much a previously monolithic firm has lost in the past quarter, or how many layoffs a firm announces as a percentage of total employees, or how much the market rallied in a two-day period, or last week's headline that the S&P 500 had its biggest weekly gain (+12%) since 1974, we are living in one of the most interesting times in the modern financial era. Your children, grandchildren and even great-grandkids will one day be studying the events leading up to, during, and even what's now still to come in what will be deemed The Second Coming of the Bear of the 2000s. (I suppose we could call it The Beginning of the End, but I'll reserve that headline for an upcoming piece.)

It's been several weeks since I last wrote a column here, so I'd like to update you on the first recommendation I submitted for the site this fall. Let's take a look at the trade I suggested in my inaugural RealMoney piece of Oct. 6, which was to buy large-cap stocks vs. small-cap stocks. I recommending the purchase of the S&P 500 ETF, the SPDR Trust (SPY), and buy selling the Russell 2000 index ETF, the iShares Russell 2000 (IWM), against it. The weekly chart of this spread as it appeared on Oct. 6 follows below:

Oct. 6
Click here for larger image.
Source: CQG

I argued for the case for a double bottom (against the 2006 lows), stemming from the quick thrust higher after making new multiyear lows just under those same 2006 lows, as well as a likely solid bottom in the slow stochastics and a MACD chart that was close to getting a positive crossover buy signal. I said that over time we would likely see a test of the early-2008 highs (right near 2.0, or in other words, that the value of the spread would move from about 1.75 up to the 2.0 level).
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DDM $66.61 0.00%
DIA $177.30 0.00%
IWM $111.62 0.00%
QLD $68.97 0.00%
SPY $206.16 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs