HAPPY DAYS ARE HERE AGAIN!!

Just a few more weeks to go until the end of the third quarter. Investors around the country will soon after be receiving their quarterly statements and will be thrilled to see that in the past quarter (should trends remain as they are today) every asset class gained in value! Investment advisers will be calling clients to show them how exceptional they are a picking stocks and funds.

If you've been brave enough to get into REITs, despite the warnings that commercial real estate is the next "shoe" to drop, you will be a real hero as REITs rose nearly 7% just in the last week alone! Over the past 10 weeks, REITs have soared nearly 35%. There's no real estate crisis here.

Foreign stocks posted "modest" gains last week rising between 4% and 5%. Even bonds, which have been the laggards so far this year, advanced this week.

WHAT'S THERE TO UNDERSTAND??

I've been writing since June, thinking that the market is due for a correction but it acts as if nothing really happened in the past year. Even Treasury Secretary Geitner recently bellowed out Mission Accomplished (well not in these exact words but you know what I mean). My index of 208 industry leaders showed an impressive week rising 3.3%. Advances led declines 173 to just 34. Only six stocks were in overbought territory.

It won't be long before the buy and hold group starts boasting how the buy and hold strategy is still the most effective method of taking gains in the stock market. Only time will tell. For our part, we added Dec SP 1050 short calls to our portfolio with an income of $4,650 for each $100,000 portfolio. Should these calls expire worthless at the end of the year, our core portfolio gain will be right around 20% for the year. There is plenty of time premium to burn in these options and we expect that even if the market continues to rise, come the end of the year, people are going to want to take some money off the table, at least for Christmas presents???