Posts Tagged ‘stock market tips’
The bulls have been good to us so far in 2012. The stock market continues to show optimism; the key stock indices are displaying a “golden cross, with the 50-day moving average (MA) above the 200-day MA. All of this buying bias is encouraging, but the light trading volume tells us to be careful, as there continues to be numerous threats that could drive fresh selling.
Bullish investor sentiment in the stock market continues to drive buying interest despite the technically overbought condition. The key focus remains Greece, which has agreed to the tougher austerity measures. You would, too, if you were asking for another $171 billion!
Growth in the eurozone contracted 0.3% in the fourth quarter and speculation is that a mild recession may surface. Earlier this week, Moody’s downgraded six eurozone countries, so there will likely be more issues down the road as Europe struggles with debt.
Some of you may be too focused on the improving economic renewal domestically, albeit the Industrial Production and Capacity Utilization readings for January were below estimates and short of the December readings. And, on the home front, the NAHB Housing Market Index improved; however, it remains well below the level considered healthy.
In the stock market, the S&P 500 is facing resistance at 1,350-1,360 and will need a strong catalyst to break higher towards 1,400. The bullish investor sentiment in the stock market continues to drive the positive bias in stocks, but I’m seeing some stalling on the charts. The bias is for higher gains, but the lack of strong trading volume is somewhat of a red flag.
You need … Read More
The decline in stocks should not be a surprise given that the stock indices were unable to break or hold above some topping resistance on the charts. The failure to break higher was a red flag.
There are numerous technical breaks to the downside on Wednesday, with all four of our key stock indices turning negative this year. The NASDAQ and Russell 2000 are trading below their respective 50- day moving average (MA) and 200-day MA. The DOW is below the 200-day MA, but holding just above the 50-day MA. The S&P 500 is holding precariously around its 50-day MA. I feel that the recent failures to break above the chart tops for the various indices were bearish.
Watch for downside supports as follows: DOW at 10,000; SP 500 at 1,040; NASDAQ at 2,100; and Russell 2000 at 600.
Driving the selling was renewed concern towards slower growth in the United States by the Federal Reserve, along with news of slower growth in China and England. Weakness in China could easily spread globally to Europe and the U.S. due to economic interconnectivity. News of lower imports in China is driving concerns of slower growth in the country, which would also impact other global economies.
Overseas in England, the central bank lowered its GDP estimate, blaming the potential slowing in the U.S. and the eurozone. Germany also announced slower growth.
The Fed will expand its measures to increase lending; even so, this may not be enough to avoid weakness imported from overseas economies. Again, the fear of a potential double-dip recession is surfacing.
In addition to the economic growth concerns, the … Read More
With the first half of 2010 behind us, here’s an update on where I see things headed for the remainder of 2010, and where I believe my readers can make some money:
The surprise in stocks for the immediate term is on the upside. People are still very worried about the economy. National debt is out of control. Employment is high. Retail investors are staying away from the stock market. But corporate earnings are beating analyst expectations.
If you were to ask me about the short term, which would include 2011, I would tell you I am very bearish. I’m bearish because our dollar cannot sustain its value on the great amount of debt we have accumulated. National debt of $20.0 trillion by the end of this decade (we’re at over $12.0 trillion today) will place immense pressure on the U.S. dollar, which will eventually result in higher interest rates.
Higher interest rates may also be required as a deterrent to rapid inflation, which has historically been a problem for America after a prolonged period of easy money. But, for the months ahead, the Fed cannot raise rates because the economy is fragile. A low-interest-rate environment combined with rising corporate earnings is what the stock market loves. So I’m bullish for the immediate term, bearish going into 2011.
Like I’ve said all along, the bear market rally will suck more investors in before its next leg downward. And the best way to suck investors in is to move the market higher so investors feel that all is well again.
I bought more gold last week, because I believe … Read More
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