Market Comment 12 16 09

The stock market is generally in a trading range with a positive bias. Junk bond funds are trending up, but some other bond/income funds have weakened due to recent weakness in Treasury bonds. Greater than normal crosscurrents are in play during the end of the year and the first few trading days of the new year, which can lead to significant volatility at the beginning of the new year.

In the December issue of The Gerritz Letter I pointed out the negative market technicals at the time. The technicals have since improved and has resulted in a sideways trading range market rather than a correction.  The S&P 500 has been in a trading range since Nov. 13th. View the chart below.

(Click on chart to enlarge it for easier viewing)

I recently estabilished a position in Putnam Diversified Income Fund (PDVYX) for most accounts. This fund is in a low volatility uptrend and pays a very nice dividend.