Sunday, 19 July 2009

Weekly Wrap: Your source for stock, stock market, and stocks info


Weekly Wrap: You can see that this week was a resounding attempt at reviving the continuation of the bear market rally. We had basically a three month period where the S&P essentially was flat. I had anticipated a moderate pullback because of how far and fast the market had risen from the March 6th lows, and put on a couple of short positions. A few of them got stopped out, and I covered some of the others because the market wasn't doing what it was supposed to if we were going to experience a decline. I think this week was a turning point in the this bear market rally on sentiment. A lot of well-known and staunchly bearish pundits and analysts (Nouriel Roubini and Meredith Whitney) turned quite bullish. Whitney said Goldman Sachs was a buy and Roubini predicted the end of the recession this year. I was really surprised by both of their statements, and they happened in the SAME WEEK. I respect both of their opinions, but ultimately I think they will both be wrong down the road. Just give it time. There is another thing about analysts and economists. Both have made a name for themselves (even becoming celebrities in the financial world) in the past 2 years by being bearish on companies and the economy. If the economy does have somewhat of a crack-pipe, stimulus-induced rebound because of fake money printing by the Fed and US government, they can't afford to continue to be bearish when stocks are rising and the economy gives the APPEARANCE of recovering. So, i don't blame them for turning bullish, but when the market begins to fall again. I don't think either of them will want to ingeminate their current stance when that happens. I expect a sideways to down week, next week, after a 6.97% rally for the week. Personally, I think the market move this week was rather unwarranted because the economic data isn't particularly compelling. There are some whispers that last week was options expiration and that next week the market will collapse. The idea is that the reversal to the upside this week was actually deceptive. But I heard rumors last year that the COMEX market was going to shut down because market players were going to ask for physical delivery. Didn't HAPPEN. So I tend not to put much credence to such baseless conjecture. The chart of the market will tell you everything you need to know. Look at a 5-year chart of CIT Group Inc. (CIT). All the talk this week was are they going to go bankrupt or not? Is the government going to bail them out or not? Well, it didn't start going down yesterday. It has been going down for 2 years. Bankruptcy?! Methinks, YES.

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