Watch out for the Bear Trap
Thursday, May 1st, 2008
By George Leong, B.Comm. for Profit Confidential
The threat of an economic meltdown continues to pick up steam in the marketplace. Some of the recent headlines from Yahoo! Finance have suggested more market havoc in front of us.
Headlines in the news have read:
“Buffett Says Recession May Be Worst Than Feared” “Vacant Homes Hit Record High” “Market Sages: The Worst is Yet to Come” “Consumer Confidence Drops to Lowest Point in 5 Years”
You do not have to be a market wizard to figure out what is happening. But you do need to be prudent not to be trapped in what I continue to believe is a Bear trap.
Oil is near $120.00 a barrel and the trend is positive. Some believe that oil will move towards $200.00 a barrel over the next several years. If this should materialize, it could really drive down the economy. Now you wish that the government had put more pressure and had provided more monetary incentives to develop non-fossil fuel powered vehicles. The technology is there, but, without full government backing, the ability to move forward and develop a cost-effective solution is fruitless. This also indicates the power of big oil companies in the United States.
On Monday, the “oracle of Omaha,” Warren Buffett, who also happens to be the richest person in the world, suggested on CNBC that the economy in the U.S. is in a recession that will get worse. And when Buffet speaks, everyone listens, as he has proven over time to be the most insightful investment guru of all time. “This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think,” Buffett said on CNBC.
If you are reading this and have followed my commentaries, you’d understand how concerned I am with the condition of the U.S. markets and economy, along with the potential impact from across the Pacific in China should that country slow in the upcoming quarters, as many are expecting.
Next Post: Markets Showings Signs of LifePrevious Post: What the Two Most Important Stock Charts of Today Tell Us
Tags: market view, U.S. economy
Tweet
Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"
We respect your privacy and
will never share your e-mail address.
George is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. His trading advice on stocks and options is also found on his daily trading site, Daily Profits. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services.



