Follow by Email

Monday, January 3, 2011

Bull or Bear?

Below I will display some recent copy taken from a newsletter writer and let you decide whether he is Bullish or Bearish. Really makes little difference. I would suggest taking a reasonably contrarian view of the market. It would appearthat any reasonable investor with the ability to think forthemselves now realizethat the market has been artificially pumped up by the Fed for well over a year now. In fact I dare say the Fed has been manipulatingthis market since the Obama administration took office. This is not an opinion on this practice one way or another, it simply is what it is, to think otherwise is fallacy. QE whatever number is the same thing over and over, and it is simply a printing of money to keep a pyschologically pleasing index on the Dow and S&P. At some point real earnings and economic growth will have to backstop this practice, maybe 2011 is the year. As an investor you have to keep track of the best ways to gain absolute returns, doesn't matter what, who, how or where, it simply requires enough independent research to think for yourself and gain some perspective on how to best use your dollars. Read the following:

*****Since China is a major source of growth for the world economy, investors pay intense attention to its every move. So when China says it will continue to buy Spanish bonds, despite the well-publicized debt issues, it's an important vote of confidence.

And we have to acknowledge China's savvy move here. It depends on the global economy every bit as much as the global economy depends on it. So when China goes right to the heart of problem and voices support for Spain, it's a good thing.
*****Now, investors are clearly looking at the bright side right now. In fact, they have been doing so for a few months. And while there can be no doubt that the economic situation has improved, there are still risks to growth.
Given that investors have been solely focused on the upside, it would seem likely that the next shift in sentiment will be toward recognizing risks, rather than further upside.
When will such a shift occur? Well, that is the big question. The S&P 500 is in the midst of a strong support/resistance zone between 1,260 and 1,280. With the S&P 500 approaching the upper end of that range, we could see some more serious selling soon.
As I've been saying for the last couple of days, have cash and wish-list of quality stocks ready...

Me again: Remember pull backs make for great buying opportunities, so any market adjustment will give you a wonderful buying trend. Look for companies with real growth, not simply corporate cutbacks for bottom line wins, also companies that have strong cash positions and have wittled down debt during the last 6 quarters. Lastly, put on your alternative investment caps and look at private placements and hedge funds as there are some strong wins to be had in these areas. In the coming days I will give you an invitation for a unique webinar that will discuss Alternative Investing and the opportunities for 2011! Here's to making smart decisions about money!