Message of the market has been clear.....there ARE issues in US economic picture....worlds biggest importer of all goods...which in turn affects China the biggest exporter of most things...
HOW this tussle of hyper growth in China & slowing US economy will play out is still NOT clear...
BUT the market has sent a clear message that US is struggling with anaemic growth while China ,India & Brazil are in healthy 7% to 9% GDP growth....
Markets generally "overshoots" in digestive process also..which IS where we are.....
Overall world economy IS much healthier than the commentary in CNBC..BUT CNBC thrives on "negativity"...
Even US will end up with 3% GDP growth for 2010.....NOT a definition of "double dip in economics 101"..BUT CNBC ignores all economics definition to "allow their programming to inject fear"
SO..many have panicked into selling their trading positions & long term investors are switching into "safer money market funds"...as evidenced by lower bond yield...
NOW...the question is .....who is left to sell ?
OR..how much more selling can be generated by "pre-programmed computers"...?????
IF we look @ market stat...S&P 500 have corrected 17.12% from its high in April..on a closing basis we are down 16.17% in a short 12 week span......
So what is the prediction for S&P 500 by chartist/bear....880......
The question is will we ever get even close to that number ????
RSI in S&P 500 is 30.28...where there is "buying support"......
The simple question we all have to ask......ARE we as bad as "financial meltdown of 2008"?
IF you put this question to any bear in any forum..they will reluctantly agree that it is NOT as bad or even close to it........
AGAIN......market gives "unreal buying opportunity" every so often..& this MAY be the best one of 2010....
When S&P 500 is down 9 out of 10 trading days & QQQQ is down 10 out of 10 trading days..can we say that "capitulation has already occurred" as evidenced by low volume lately??
Risk reward ratio is pretty compelling.......IF you were buying @ much higher levels..then NOW must be a bargain point....?
Ensure your comfort level BUT have a diversified portfolio of stronger sectors.....
Buy low & sell higher still works.
Most world markets are open on Monday including Canada which MAY give an indication IF selling is over.
BLOG does NOT give buy or sell.
Saleem
6 comments:
Good morning Saleem and others;
S & P's Arbeter wrote this morning,"major indices have broken critical support, opening the door for much larger losses"..."first major support lies @ 950, further damage could bring us down to 883..."we then see a strong rally the last 2-3 months of the year with the S&P closing around 1100. This of course is just one mans opinion. I thought I would pass it along. My own feeling is that we trade flat to slightly down, until better than expected earnings start to come out in a couple of weeks. GLTA.
Hi Victor,
Thanks for posting Arbeter's view of things to come on the downside...
Trouble is that all these downside numbers are being ratcheted down..AFTER we have gone lower already....
Chances are very high that we rebound from here...imho
Saleem
hello
there is much to much commentary about a second recession and a crash and a recession coming and a second correction
Well boys it has been coming
just look at my funds drop in value--I am ahead of the previous drop but it feels like pain any way
I do not like pain so I have bought 5 start funds and divi stocks -- the divi stocks have dropped some but NOT like my funds
My VOD and SEP are up 7%
I am buying SFL and NLY --lets hope this buy pays off for me
Best regards
Hi Madmax,
Robert Prechter is predicting Dow 1,000 from current 9,686..a drop only 8,68 points or a drop of 90% from hereon......
For the record ....in the last 40 years of Robert Prechter predicting buisiness...he has performed 1% WORSE than S&P 500...
Saleem
SALEEM
Good Morning to you and all
I have to turn off the news at times as it is full of hype.
I do catch J Cramer and Slow Money--they both scream to much for me.
Robert Prechter is a loser
The economy is in a very slow recovery mode and deficit spending is not helping us at all.
IMHO, we will have a very slow recovery over the next 2 years. If we switched to Natural Gas we might have an easier recovery but politics says NO.
Just some thoughts
Hi Madmax,
Slow recovery is non-inflationary..which is good for the quality of profit.
On internet..i watch fast money & mad money to get a thinking of what they are upto.
Prechter never apologizes for missing his low target by a mile..in 1987 his target for Dow was 400..low was 1700....BUT he has his followeres.
Prechter in 2009 was predicting collapse of Gold prices..BUT Gold went to series of new all time highs....
Saleem
Post a Comment