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In The Stock Market, What Goes Up…

…must come down. That’s how the “old” saying goes, but is that going to be the case with the stock market? The question is when is it going to start moving downward again? The last month has been great for some hefty gains and it’s actually been able to stay at these levels for over a week now.
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Two weeks ago I said that it was time to start scaling out of some of my positions to lock in the gains that I’ve made. During a three week run in the stock market, I gained over 22% in my portfolio and was quite happy. During the last two weeks, I did just that. Unfortunately, I didn’t read the trend that was going on and missed out on what could have been another 12%+ in my portfolio.
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Days like these will happen and as an investor, I’ve learned not to get myself “bent out of shape”. Instead I look at the positive side, which is the fact that I made a good chunk of change. I still own some position in the stocks, just not as many as I did two weeks ago.
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The truth of the matter is that the market will back off. But to what level. Can the DOW pull back down below 7000? Is all this growth in the past month in the stock market temporary? Is the worst to come, already past us? It seems that no matter what form of media you get your news from, they talk about how the stock market recovers six months before the economy does with unemployment shortly behind it.
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If that’s the case then, it’s time to wait for any sort of a pull back and start accumulating shares. I’m still thinking that the worst is not over. The DOW at 7000? Yes, I do expect to see that again real soon (I just expected it sooner). At where the DOW sits now, it means that there should be a 12.5% correction in the market. Like I said, I do see it it coming, but it may take as long as three months to get back there.
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Or will it?

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Stock Market Technicals

market technicals

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I’ve been warning many of my readers that the stock market will take a dive very soon and from the looks of the last few days, that time has come. If you look at stock market technicals, you are aware that the DOW at a level of 7550.00 is a level that would cause many sell-offs to happen.
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Today’s lows of the DOW was 7551.01, which came very close, but not to the point where the sell off would have occurred.
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I said it before and I’ll say it again, you need to keep plenty of money on the sidelines for times like these when the prices for stocks in good companies are at a great “sale” price. These companies are not damaged, just the stock prices are. You need to be ready to take advantage of these buying opportunities to help grow your portfolio during a bad economic down-turn.
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For those of you that have had patience over the last month or so, this just might be the time for you to jump in and build a good solid position in the companies that you’ve been watching. I’ve been holding back in jumping in with both feet and with the stock market down at these levels, it’s hard not to just dive in head first. Of course I won’t involve my emotions in the markets.
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Who knows where the markets will be in a month or two from now. Especially with the fact that Obama’s stimulus plan hasn’t really been accepted by Wall Street and Main Street. On the news of the plan being approved, the Dow has dropped quite a bit. The markets can hit that crucial level of 7550 and all bets will be off, the sell off will begin and it won’t stop until it get to about 7300 basis points. Then again it may just take back off to the 9000 level just like it did not too long ago.
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No matter what, the rest of 2009 is going to be a total washout and the only way to get your portfolio to grow is to make trades when the time is right and then get out while the getting is good. Either way the market may go either way over the next couple of days, you should keep an old saying in mind, ” hope for the best, but prepare for the worst”. This way you’ll be ready without being disappointed.

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The Stock Market Year-End Rally

What a year this has been for the stock markets. When this year started I knew the indicies would drop quite a bit, but no where to the levels that they are at now. After the years we had in 2005-2007, there was no way that the DOW or any other market would have a positive one in 2008.
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I’m looking forward to the next year to start already. I figure that there are many who are waiting for it as well. Holding off on the sidelines and just wait out the rest of this year. I’m very optimistic about 2009 and expect a very profitable one at that.

We will need to stay away from certain sectors for the beginning part of the year and in some cases, stay away from others all year long. Which ones they are, I’m not really sure, but I do know that the real estate market is one that I will be involved in sometime in the year.

The markets have held up well in the last two weeks (even without the Santa rally) and I expect this week to be higher than where it closed on Friday. So hang on to your hats and enjoy the ride.

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Merry Christmas To All

It’s that time of year again where everyone is to have happy thoughts and share time together with their family and loved ones. Christmas is suppose to be a happy time, but with the way the economy is, it hard to stay positive and enjoy the season.
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I’m basically a positive and generally a happy person. I would like my readers to try to be the same way while these times are upon us. Yes, we lost money this year or at best didn’t make as much as usual, but most of us still have our health and all the read this are still alive. So try to think of happy thoughts and remain positive.
The stock market will turn around in 2009 and we will get past this financial crisis as well as all the other things that has happen.
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I want to wish all of my readers a merry Christmas and a happy holiday season. I thank you for being a part of this blog for the last five months as I prepare to build on what foundation I’ve laid during that time. Without you this blog wouldn’t have come as far as it did. With your continued support this site will only get better.
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Thank you once again and have a save and happy holiday.

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Happy Thanksgivings

stock market
photo by mathew ingram

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What a week in the stock market. In the last four days the DOW and the S&P 500 have had gains. The DOW gained 15% while the S&P 500 gained 18%. I don’t know about you, but that’s something to be thankful for.
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We will have to see what happens after the holiday. I’m sure that there will be profit-taking going after the ride that we just experienced, but that’s OK. I look forward to seeing where my stock decisions will take me over the next week. I feel that I have myself in a good position and will take profits as I see fit.
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There are so many things that I’m grateful for in my life this year. I will get the chance to be with my family for some good times and some great memories. I have a lot to do to get ready for tomorrow, so I hope that all my readers have a happy and healthy holiday. As for the readers that are not in the U.S. and don’t celebrate the holiday, I hope you enjoy whatever you do while the U.S. stock markets are closed. I know that the other markets around the world will be open so I wish you happy trading.

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General Motors And Ford Motor Company

General Motors And Ford Motor Co. as well as Chrysler are in Washington begging for money that they so desperately need. For more than a week we’ve been hearing them say that they will not last very long without the money.
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If the three auto makers go belly up and close their doors, it will cause about two million jobs within the United States. That would be the nail in the coffin in this country’ economy and send us closer to a depression.
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From where I sit, I see three companies that have been dragging their feet for the last three decades. We knew in the 1970’s that they needed to build a better fuel efficient vehicle and they along with the government’s protection, have been keeping the standards and the vehicles being as efficient as they were then.
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Yes, the Ford Expedition, the Hummer as well as the GMC Yukon look and drive great, but that is nowhere near being a wise choice to saving our dependence on foreign oil. None of these companies wanted to build the smaller cars in fear that no one would buy them. Guess what guys, no one is buy the one that you did build and that’s why you’re on your knees in Washington.
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The big three auto makers have the unions that are not helping the matter either. UAW (Union of Auto Workers) have been strong arming the companies for so long that it’s excepted has how it’s suppose to be. The union have been making more money of the workers than the auto maker are.
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BMW, Toyota and Honda all have plants here in America and employ Americans to build their vehicles. There are no unions in any of the facilities and their won’t ever be. They offer their employees great benefits as well as great pay. The average worker in these plants make $40-$48 per hour and don’t have to pay any union dues. They are not forced to work extended hours for the same amount of money per hour. They have the option to contribute to their 401K plan and make their own decision for the retirement.The days of slave labor in manufacturing plants in America are over,and these workers are protected from that type of employment.
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Let’s look at the big three, their average worker make $78 per hour and have to pay a ton of union dues to help them keep their jobs. They are also protected from slave labor, but there are labor laws in this country that do that already. What about their retirement? They are enrolled in the companies pension plan. which is covered with all the other dues they pay. The problem is that the three auto makers can’t even pay for the pensions that are out there already. Their pension payout keeps growing with no end in site.
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Giving the big three auto makers this money is more like throwing it away. These guys have been helped out in the past and will continue needing the assistance of the American tax payer to save their rear end. This is a capitalist country so let’s let capitalism work it way through.
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Patience And Timing Are Everything

Today the latest retail numbers were released and I’m sure most of you (if not all) weren’t surprised. Let’s be for real, the economy is in the crapper and to expect any retailer (except Walmart of course)to post good numbers in this quarter or even the next.
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The results were devastating and to make matters worse, the rumor out today was that there are more hedge funds redemptions. This is just a continued de-leveraging of the markets. Unfortunately no one really knows how many more hedge funds are going to drag down the stock market. This type of roller-coaster ride is far from over.
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Expect that each time the markets make up some good ground like they did in the last two weeks, hedge funds will take profits and dump their positions. So my advice to my readers are to do the same. In this type of volatility, anyone invested in the markets need to be more of a trader than a investor. Take caution and profit where you can and hold on to a good portion of capitol on the side for when days like this take place.
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There quite a few companies that their stocks have taken a beaten. If you are prepared with capitol, you can pick up some shares at a great discount. As a matter of fact there are too many that fall into this category. Too bad that it would take me about a month to list them.
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I’m sure many of my readers have their selection of stocks that they favor which have dropped in share price, so take your time and if you do get caught in the red, be patient and leave your emotions at the door.

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Election Day And The Fate Of The Stock Market

I’ve been very busy today and that’s why this post is being done much later than I usually do. Between voting and listening to all the election news, it’s been been pretty hard to keep up with the stock market today. Don’t get me wrong, I’ve been able to follow the major stories in regards to the markets and I’m surprised to see that it was a good day for the three indices.
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The DOW and NASDAQ were both up over 3%, while the S&P 500 is up 4%. Considering that it’s election day with a lot of issues about our economic future, it was a great day in the markets. Some of the sectors did much better than others. Health care doing the worse of all of them. Consumer staples also didn’t fair as well as I would have thought with the DOW gaining 305 points.
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Alternative energy stocks did very good today and that comes after a great bounce for the sector in the last 5 trading days. Let’s look at the leader in that sector, First Solar (NASDAQ:FSLR) which was trading at $107 a week ago, had a intraday high of $178.60. There was a major move for the entire sector during that same period. Speculation is that the sector was oversold and it took awhile for investors to start taking a stake in the sector again.
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According to the experts, an Obama win in the election has already been calculated into the markets. The only thing that may become a problem for the markets is if the Democrats take control over in the Senate as well as Congress. If that does happen I would imagine that the markets will move downward throughout the rest of the week.
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The oil and gas sector did the best today as in regards to the sectors. Overall the sector gained over 6.5% today. As for the price of a barrel of oil gained over $6 closing over $70.

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Let’s Get Ready To Rumble


photo by Walter rodriguez

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After last week’s roller coaster ride in the stock markets, I look forward to more of the same. The volatility was off the charts (well almost) as the VIX showed through the week. With this much movement in any given stock, the possible gains are amazing. On the other hand the loses could be too much for most of us to handle.
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Going into this week, we need to be aware that we have still not seen the bottom. As a matter of fact I heard some say on Friday that last week was the turning point, but I beg to differ. If any of my readers here follow me on Twitter, you would have seen that at around 1:30pm when the Dow was up about 300 points, I responded to another who said that the markets were doing great and would continue for the rest of the day. My response was to get ready or to start selling because the tide was about to turn. I had a feeling that the DOW as well as the other markets were about to go bad.
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Feelings??? I know I tell my readers all the time that you feelings have no place in the stock market. I wasn’t referring to my emotional feelings, instead I was talking about the vibe of the markets. After you spend enough time trading within the markets, you start to sense when the tide is turning. Add on top that my knowledge and experience tells me that there is a lack of confidence on Wall Street.
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As we go into this week of trading, you need to hope for the best, but expect the worse. Make any trade you do wisely and have your exit strategy ready. Watch the trend, keep an eye on the technicals and leave you emotions at the door. Get ready for another wild ride.
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So in the immortal words of the WWF (World Wrestling Federation)…”Let’s get ready to rumble”.

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Confidence In The Stock Markets Are Down

Yesterday was one of those days that I’ve been talking about. The Dow fell 733 points, NASDAQ dropped 150 and the S&P 500 lost another 90 points. After Monday’s rally, I knew this would happen once again. I do expect more of the same for the rest of the week. How much? I don’t know, but I will say that it will go in the direction that would rather not see.
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The markets don’t have the confidence it needs to go forward. I myself don’t believe in them and have sold out of 90% of my holdings around lunch time yesterday. What I’m still holding on to are two stocks that have great yield and will be paying out within this month. the average yield on these stocks are 6%. One is in the pharmaceutical sector and the other in consumer goods.
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Dividend paying stocks are the only thing that I would invest in at this time. If the price of these shares go down before the ex-date, I’ll pick up some more. These two sectors are the area that we as investors need to look at. In a recession these sectors hold up quite well and as Jim Cramer from Mad Money and TheStreet.comsays, “if you can drink it, smoke it, eat it or medicate yourself with it, it’s the stock you will want to own in these times.
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If you are in any stocks that don’t fit that criteria, you need to sell and hold on to your cash until the markets come down another 5-10% from where their at right now.

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