S&P 500 Addition of First Solar Idiotic

I heard this evening that First Solar (FSLR) will be added to the S&P 500 index when Pfizer closes its acquisition of Wyeth soon. First Solar is an innovative fast growing solar firm. However, there is a glut of solar cells on the market which is expected to cause a decrease is solar pricing and margins. As a result, this is another case of S&P adding a company to its index when the company is at its peak. S&P did the same thing during the technology boom adding Yahoo and others to its index during the height of the tech bubble. This action once again demonstrates why the S&P 500 is a not a good index to be invested in.

Down Day but Optimism for Hotel REITs

The markets were lower today with 4 stocks up for every 5 stocks down. Notable today was a continued increase in casino and hotel REIT stocks. The most beaten down and speculative securities have continued to outperform in this market. I have serious concerns that this winning streak will not be able to continue forward.

No Social Security Increases for the next two years

I was watching NBC Nightly News tonight and Brian Williams announced that there will be no increases to Social Security for next year and the year after.

Sure looks like no inflation on the horizon anytime soon.

It is amazing to watch the action in the commodity stocks today. Energy, Metals, and Agriculture all up big today. Is stagflation in the future? I think there will be pockets of inflation as there was a discussion on Fast Money tonight that water prices will soar over the next few years because of a lack of supply. Scary news!

Let's hope for the best.

Swine Flu Adding Pressure to Stocks

The swine flu continues to spread throughout the world, causing stocks to feel downside pressure this morning. Also not helping is the Federal Government telling Citigroup and Bank of America that they need to raise more capital. Trading continues to be challenging in this market.

Market weakness continues. Strength in metals and agriculture.

Market weakness continues with financials leading the way lower.

From Jan. 1st through the 17th:
The S&P 500 is down 5.9%
The Dow Jones is down 5.6%
The Nasdaq Composite is down 3.0%

Strength is currently being experienced in Metals and Agriculture.

Ride these sectors until they cross back below their 50-day moving averages.