…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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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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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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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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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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