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Harry Newton's In Search of The Perfect Investment Technology Investor. Harry Newton

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9:00 AM EST, Monday, June 22, 2009. Ten-year treasuries are paying nearly 4%. This chart shows how the panic of late last year -- flight to safety at any cost -- has ebbed and yields have returned to more normal levels.

Interest on Treasuries attracts Federal income tax (the highest) but is exempt from state and local taxes.

TALF may be interesting. I'm hearing buzz. But I don't know enough yet. For more, click here.

Is the Bull Run Pulling Up Lame? The headline in today's Wall Street Journal reads, "Overextended Rally Seen Ripe for Downturn; Look Out 6547.05, Says Mr. Roth." The article reads:

The stock market is stumbling.

After a powerful rally that pushed the Dow Jones Industrial Average ahead by more than 30% in three months through last week, stocks are clearly having trouble extending their gains.

Many analysts see a pullback ahead, and they are debating whether it will be just a temporary annoyance or something bigger and more painful.

Indicators of market health, including trading volume, buying demand and trading by companies and corporate insiders, are beginning to flash yellow or red. People also are beginning to question whether the economic fundamentals are strong enough to justify continued gains.

The Dow finished Friday at 8539.73, down 3% for the week. It is at the same levels now as in early May. The Standard & Poor's 500-stock index, which a week ago was up as much as 40% from its March low, ended Friday was at 921.23, still 36% above the low.

"This 40% rally isn't based on a 40% increase in fundamentals," says Michael Farr, president of Washington, D.C., money-management firm Farr, Miller & Washington. "The economy is still declining. Credit isn't coming back. Unemployment is rising and we are seeing a much less robust consumer. I think the market at some point is going to give back a large portion of these gains."

Mr. Farr and others say it is impossible to know whether the market already has topped out, or will edge higher before giving up the ghost. But even many bullish investors see a downturn ahead.

Stocks have surged since early March in part because government stimulus spending has found its way into financial markets and because some investors have moved money out of cash and into stocks.

Other investors may emerge from the sidelines. China Investment Corp., the giant sovereign-wealth fund, is considering potential U.S. investments. Its chairman, Lou Jiwei, has expressed concern that the fund is in danger of missing opportunities as the market rallies, according to people who work with the fund.
[Dow Jones Industrial Average]

While those forces could keep pushing stocks higher for a while, some investors and analysts see signs that the rally's underpinnings already are weakening.

Stocks seem a lot less cheap than before their big gains, and investors are no longer impressed when the economic news is simply less bad than before, says Linda Duessel, market strategist at Federated Investors in Pittsburgh.

She thinks improving corporate-profit reports will help push stocks significantly higher in the summer and fall. But, first, "history would suggest we would get a 5% to 10% correction somewhere," she says.

That's the optimistic view. Pessimists think the damage could be greater, and the real pessimists worry that stocks could fall to new lows by autumn. They say stocks just aren't behaving as they have at the start of past bull markets.

Consider trading volume. Average daily volume for all New York Stock Exchange stocks hit a record of 7.21 billion shares in March, as the rally began and heavy buying sent stocks sharply higher. That slipped to 6.42 billion in April, and so far this month, it is running at 5.14 billion, putting it well below the 2009 average of 6.15 billion a day.

"A new bull market is one when investors are prepared to commit larger and larger amounts of new money to equities," says Paul Desmond, president of Lowry Research in North Palm Beach, Fla. "What we have seen here is a very consistent drop in total volume going back to early April."

Mr. Desmond says his data, going back to the 1930s, don't show any new bull market with such a weak volume trend, which leads him to believe that this rally won't become a lasting bull market.

Other data reinforce that concern. The number of stocks joining in the gains has begun to shrink, which doesn't typically happen this soon in a real bull market. And Mr. Desmond's measure of stock demand, based on the amount of trading volume and price change occurring on stock gains, indicates that demand has been fading, another negative signal.

"Investors are risking smaller and smaller amounts of capital and that is a bad sign," Mr. Desmond says.

Phil Roth of New York brokerage firm Miller Tabak shares many of these concerns, and has other worries as well. New stock issuance hit a record in May, he notes, which has created a lake of supply just as demand is softening. Senior corporate officers, who had been buying for their accounts earlier this year, have become net sellers. Neither trend supports the market.

Mr. Roth says indexes still might gain some ground before topping out, and he wouldn't be surprised to see the Dow hit 9000. But once it starts to fall, he fears, it could sink below the March closing low of 6547.05.

People who recently took money from cash and bought stocks won't want to reverse course unless they get a shock, he says. If they do get a shock, perhaps an indication that the economy's troubles are more lasting than people had hoped, that could produce new selling and new lows. "At some point, investors will be saying, where is the good news?" he says.

Mr. Roth also tracks corporate-bond yields, because falling bond yields make bonds less desirable and can help stocks. While Treasury bond yields overall have been rising this year, the difference, or spread, between corporate yields and Treasurys has been shrinking.

The spread between yields of double-A corporate bonds and Treasury bonds has averaged 1.45 percentage points over the past 30 years, Mr. Roth says. At its worst during the credit crunch last year it was 3.81 points. Recently, it has fallen to 2.78 points, better but still not half way back to average. That means corporate bonds remain more attractive than normal and are competing with stocks for investor money, especially when investors are nervous.

Given the big recent stock gains, investors seem to be waiting for either a fall in price or a considerable brightening in the economic outlook before they put a lot more money into the market.

"We could see a little bit more upside and then some very frustrating, choppy trading in the summer, setting up for a traditional October low," warns John Schlitz, chief technical strategist at Instinet in New York.

Please avoid Airbuses: Subject: Air France Air Bus Crash. If you can, please don't fly Airbuses. There has been a lot of scuttlebutt around about the construction of Airbus aircraft for some time. A Brazilian Naval unit reportedly found the complete vertical fin/rudder assembly of the doomed aircraft floating some 30 miles from the main debris field. The search for the flight recorders goes on, but given the failure history of the vertical fins on A300-series aircraft, an analysis of its structure at the point of failure will likely yield the primary cause factor in the breakup of the aircraft, with the flight recorder data (if found) providing only secondary contributing phenomena. It's regrettable that these aircraft are permitted to continue in routine flight operations with this known structural defect. According to a maintenance professional who salvages airliner airframes for a living, Airbus products are the flimsiest and most poorly designed. The manufacturer has an almost obsession to use composite materials. According to an email, "I have one A310 vertical fin on the premises. It was pathetic to see the composite structure shatter as it did, something a Boeing product will not do. .. The Airbus line has a history of both multiple rudder losses and a vertical fin and rudder separation from the airframe as was the case in NY with AA. .. While Boeing also uses composite material in its airfoil structures, the actual attach fittings for the elevators, rudder, vertical and horizontal stabilizers are all of machined aluminum."

Clearly, 1. I'm no airline expert. 2. We don't have an official report of cause. 3. We may never have a real report since there's politics involved. 4. There are have been other recent Airbus crashes. Check Google.

My suggestion is purely cautionary -- if you can, avoid flying the Airbus, for now.

When I get rich, I'm going to buy Rubbermaid and fire the idiot who designed their storage containers. Then I will design logical ones -- The smallest is 1, the second smallest is 2, and so on. I will also put numbers on the lid and the bottom. I will make them readable. Then I will make a a whole collection where the same lid fits different size containers. Everybody will buy my "logical" containers. And I will retire a rich, happy that I solved a major world problem.

Wimbledon Tennis TV Schedule. Wimbledon begins Monday. It's on ESPN, NBC or the Tennis Channel.

The Wal-Mart parking lot:
I pulled into the crowded parking lot at the Super Wal-Mart Shopping Center and rolled down the car windows to make sure my Yelow Lab pup had fresh air. She was stretched full-out on the back seat.

I wanted to impress upon her that she must remain there. I walked to the curb backward, pointing my finger at the car and saying emphatically, 'Now you stay. Do you hear me?' "Stay Stay"

The driver of a nearby car, a pretty blonde young lady, gave me a strange look

She asked me, "Why don't you just put it in park?"

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.