Sunday, October 18, 2009

Fireworks next week!

Consumer confidence seems to be waning. Who can really say we are surprised? Wait, let me put my surprised look on.

The S&P has had 5 distributions days lately and 4 for the Dow.

Got a busy earnings week next week. The earnings reports will drive the market.

Thursday, October 15, 2009

Retail investors. Late to the game

I learned something interesting today. When we are going into earnings, the retail investor may try to buy the stock before the earnings report to get an 'edge'. Who are they buying the stock from? The people who bought the stock during the dips who are using the run-up into earnings to unload and lock in their profits! The reason for the run up is because everyone is anticipating a good earnings report so the earnings report has to really surprise the street in order for the stock to continue it's advance after earnings. This is the reason Goldman Sachs and Citibank beat the street but went down and the same for IBM today.

This knowledge is basic common sense, but until I actually heard it, it didn't 'hit me'.

Wednesday, October 14, 2009

Ten Years of the DOW 0% return! Long term huh?

They had this guy on CNBC telling us people's wealth has increased substantially since the beginning of this year. Come on folks. I go by the Dollar General everyday. Years ago, that parking lot was always empty. Now, you have to fight to get the parking spot out there. The store is always busy now. I have even found myself shopping there. They have excellent prices.

Like I mentioned in my last blog, the credit is gone. The jobs are gone also. This economy is going to be hard to grow without credit and/or jobs. I heard the Citigroup has moved billions of bad mortgages off their balance sheet over the governments (that is you and me folks). This should bode well for manipulating the earnings report in the morning. They will create an illusion that all is well. So folks who are going in and buying $JPM are paying up for the shares based on an illusion. It's ok to trade and make money on the illusion, but just be sure to Get Out when the before the party is over. Be sure to have your stops in so you protect some of our illusionary gains.