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The Bull In The China Shop

stock trading
photo by mvhargan

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What a difference a weekend makes. Last week the stock market fell over 20% with Friday having the most volatile day of the week. Now it’s Monday morning and the markets are starting the week off with a bull attitude. Opening up over 300 points with the financial sector leading the way.
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Last week we were hearing that we are entering a bad time in our economy. It was being said that this is just the being to what’s to come. The best way to describe it would be “The sky is falling” syndrome.
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Now for the last couple of hours I’ve been hearing the opposite of it a (well sort of). the past day or so, “people-in-the-know” have been basically saying that they don’t know, that there is too much uncertainty with the world economy to really make a clear call on what we can expect from the markets.
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This past weekend the European countries are now having their governments announcing that they too will be injecting capitol into their own economy to avoid similar issues that the U.S. is facing. Let me in on something…you’re too late, you’re already there.
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I don’t know about you, but I’m not expecting anything positive from the markets except the volatility will be high and the trading if done correctly will be profitable. Yes, this morning’s trading is looking good, but that’s the picture for now and we all know how that could change in a heart beat.
I’m not looking at this as the “bottom” as some are wanting to call this, but historically the markets don’t turn around this quickly. We still have sometime to wait before we see the markets level off and turn around. I’ve said it couple of times before and I’ll say it again…”Don’t believe the hype”.

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Over-reaction In The Stock Market

The news that’s being spread around today is that the markets have over reacting to yesterday’s failure to pass the “invest in America” bill. The way the market have performing today, it seems that that may be the case.
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Today is a light trading day because of the Jewish holiday and there might be more selling tomorrow when the traders return to do business. When the politicians saw what happened Monday, they made sure to come out to say that a plan could most likely be past by the end of the week. They realized that they needed to do some damage-control after they did what they did. So with these two factor to think about, who knows what’s to come for the rest of the week.
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At the halfway point of the trading day, the DOW is up around 300 points, NASDAQ is up around 60 points and the S&P 500 in positive territory of about 35. When the morning started, it looked like it was going to follow Monday’s trend, but around 10:00 that changed and has been climbing steady that rest of the morning.
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In the commodities sector, oil has taken back some of it’s Monday’s losses back today and sits at $101.00. Gold is going the other way, down $16 at the mid-trading point of the day. On Monday gold gained $22, closing at just over $900 per oz.
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Fannie Mae and Freddie Mac are the only ones in the financial sector that are not up double digit percentage gains so far today. Then again after yesterday’s sell off, how can there not be a bigger percentage of stocks that are up? On the overall view of the financial sector, it’s up 10% on the average.
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At this time it’s 1:30pm and who really knows what will happen during the afternoon trading. Congress may go ahead and do worst than what they did yesterday.

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In The World Of The Stock Markets

I’m sure all of us would like to have our world in better condition than it is today. The news in the stock market was what I was expecting and there should be more to come.
The financial sector didn’t continue it’s rally today for many reason that may take until next week to explain it all. What I will say is that the confidence in the stock markets is definitely not back. The DOW closed at 11,015 down just over 372 points.
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Goldman Sachs and Morgan Stanley came up with a nifty concept to avoid the turmoil as much as possible by transforming themselves from investment banks into traditional bank holding companies. By becoming bank holding companies, Morgan Stanley and Goldman will come under the scrutiny of national banking regulators and will be subject to new capital requirements. Too bad that the investors of Goldman Sachs didn’t think of it as a good idea as of right now, but let’s see what happens in the days and weeks ahead.
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The government has found something else to bitch about to each other than actually coming out with some real clear cut plans than just spending $700 billion of our money. I heard on CNBC tonight that that amount of money would pay off all failed mortgages that were held by Fannie Mae (I might have heard wrong, but I’m looking into it). If that’s the case why is the Treasury Dept. asking for so much? Maybe they needed some money for lunch this week, who knows?
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The 10 day suspension of shorting over 800 financial type stocks didn’t go over too well today either. It seems that what’s the sense of buying a stock if you can’t short it so you can hedge your bet. I guess it’s not a good idea to buy into a company for the sole purpose of the value to rise.
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The dollar lost some strength today as oil went on a 15% rally to close at $120.92 at the last trade that I saw tonight. Heating oil also jumped on the expected cold weather season that is on it’s way. Today is the first day of autumn.

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What A Long Strange Trip It’s Been In The St...

For the last two days this site has been out of commission because it was being moved from one hosting site to another. I do apoligize for any withdrawal you may have had, but the site is back better than before.

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As for what has happened in the last few days of the stock market, well I’ll get to that with several post this weekend. It’s been a very strange two days and I’ll try to cover as much as possible to help make heads or tails, buy or sell out of it all.

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What To Expect For The Week 8-18-2008

Again this past week the dollar gained some strength. The gain was just over 2.5% against the slue of currencies. Gold and silver fell hard this week because of the spike in the dollar.
Gold and silver prices plummeted this week on a spike in the value of the U.S. dollar. During the the week gold lost 7.6% while silver shaved off 12.5%
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The markets have benefited from the strength of the dollar and as long as our currency strengthens it will get better. I’m not sure which way to look at it, but I’m an optimistic bull and expect good things.
The DOW was up for the week, not much but it was up. It started Monday at 11,681. and closed at 11,659. As for the NASDAQ and the S&P 500 were up also, but not enough to even mention.
Commodities and Energy stocks are to be kept in focus for the week ahead
For the five trading days ending Thursday, Aug. 14, the U.S. dollar index gained 2.85% against the basket of major currencies. Over the same period gold cast off 7.61% of its luster while the sliver meltdown sliced off 12.50%. It seems that the two have entered the bear market territory.
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If it wasn’t for the action in the dollar and oil, the markets would be pretty flat. The markets only do good if there’s downward pressure on the price of oil. When the American economy removed the relationship between the dollar and gold, it put too much emphasis on oil and it’s effect to our economy.
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This is one of those weeks where I’ll just say that we’ll have to see what happens. It does seem that the markets are finding their bottoms and in due time will be back on track for the bulls to come out and play. Keep an eye on stocks that are effected by the price drop in oil. As for stocks that are tied to the dollar, start looking for your entry point into those positions. The Olympics will end next weekend and China should be getting back on track to their growth. It’s been hard to see what they’re doing when they’re too busy showing off their stuff.

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What To Expect For The Week 8-11-2008

This past week is not what I expected to see from the markets. The dollar rallied the second half of the week and the price of oil dropped even further during the same period. Oil is down for the week at $115.20, down $4.82 on Friday alone. The only thing I’ll say about that is that I did a lot of errands this week and had to fill my tank Saturday where gas has come down to $3.67 per gallon.
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Last week I stated in What To Expect For The Week 8-4-2008, that there were economic reports that were due. There was the personal income and personal spending (funny how they go together) as well as the factory orders, all of them were better than what the street expected.
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I’m glad that I took a step back this week and watched from the sidelines. Hindsight is 20/20, so looking back I could say I profited (in more ways than one) from watching, studying and learning.
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The Dow is up big this week and the trick is to see if it can sustain these levels. During the next few weeks I do expect the Dow to travel between 11,300 to 11,800 points. Other than that I really don’t know what else to expect. The last two weeks (I know they were also the only two weeks) I was more off than I was on.
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What I will say is that commodities stocks are way down and this is the time to look at the best of the breed in the sector. Freeport McMoran (FCX) I thought was a great buy at $100 and I didn’t jump at it, dropped down to $76 on Tuesday. Twenty-four hours later it was at $90 and now seems to be leveling off to $85. The dollar gained over 2% from Tuesday to Friday and over 3.5% from it’s low of the week. All this would signal that this may be the time for commodity driven stocks.
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I welcome comments and opinions, if you have any predictions or expectations, please do so in the comment box.
Thank you and happy trading.

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What To Expect For the Week Of 8-4-2008

Let’s start with what I expected last week. Out of the five companies that I spoke of, I was two for five. One can never tell what’s going to happen, this is why I took a lot of the table early this past week. I do have to say that I was pretty much on the mark when I said that the market itself would be basically flat. The DOW started at 11,371 and finished at 11,326, NASDAQ was down 3 points for the week and S&P 500 gained 5 points. Jim Cramer stated this week that the bottom is here. Well we’ll have to wait and see.

The week ahead doesn’t look like it will be anything good. It’s the first business day of the month so we’ll get a few monthly reports (personal income, personal spending and factory orders). The price of oil moved upward late last week and with crude inventories coming out on Wednesday, I believe we’ll have the price back over $130 by the end of the week. Last week Congress decided it was more important to vote on vacation than it was to vote on possible drilling in the United states. In turn that might give the alternative energy stocks a little boost. This past week news came out that Americans drove 9.6 million miles less in May 2008 compared to May 2007. I do expect the inventory to be lower than the street wants to see.

The Federal Reserve will be meeting this week and the consensus is that they will not change the rate. keeping it at 2% for the time being.

I’m going to sit on the sidelines for this week and see where the chips may fall. I see the markets being lower at the end on the week. Keep an eye on the alternative energy sector. As for the financials, it will be too volatile to feel safe in for any length.

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What To Expect For The Week Of 7-28-2008

We are starting a new weekly post here at Beating The Stock Market.com. It’s good that at this site you can get some good information, but we also want to help you beat the stock market. So every week we will bring you what we expect from the markets(or individual stocks)in the week ahead. I guess this will also show if we know what were talking about.
After the week that we had (7-21-2008) with oil coming off it’s 52-week high by 15%. The DOW reaching 11,632 and now sits at 11,371. NASDAQ and the S&P 500 finished basically flat for the week. This week the consumer report, GDP, auto sales, non-farm payroll, and the unemployment rate are due(most near the end of the week). I look forward to this week. I’m not expecting anything great or doom and gloom like, but I do see some light in areas of the market.
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This week depends on a few companies that can make or break their sectors. We are looking toward earnings reports this week to give us some light.
.Monday afternoon Mosaic(NYSE: MOS) will report their earnings. Last week Potash(NYSE: POT) had a great quarter and raised their guidance much higher than what the street estimated. Mosaic will be no different. This week will be a great week for the Agricultural sector. The price for potash $1050 per metric ton, up from $400 per metric ton in January. As for nitrate and other products they sell, they’re up too. Keep an eye on this sector even though Jim Cramer(Mad Money) feels that this sector is “out of flavor” with the investors.
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Tuesday I’m looking toward Kaydon(NYSE: KDN) a company that manufactures ball bearings for the robotics, medical, material handling, machine tool positioning, aerospace, defense, alternative energy, security, electronic and other industrial applications. This company is a big part of the wind power play that is going on now with the new grid that was approved in Texas. They also raise the 3Q dividends this past week. To me that spells profits.
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First Solar Inc.(NASDAQ: FSLR) will report on Wednesday. This is the same company that was at $81 on Aug. 16 2007 and now sits at $261(off their high of $317). I’m not too sure what to expect since their growth in the last year has been stellar and the solar sector isn’t has hot as wind power. I’ll wait to see the report, but if it’s not good I just might look into shorting this stock and sector.
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On Thursday Marathon Oil Corp.(NYSE: MRO) reports what is expected to be a horrible quarter for them. With the price of oil hit a high of $147 this month, the margins for refineries aren’t so good. The stock price has dropped 33% of their high(I’m glad I stayed away from that one, remember I’m a bull at heart). With the price of oil dropping(and may continue), the refineries may do OK. I don’t expect a positive guidance from them.
On the other hand, we have Chevron(NYSE: CVX) reporting on Friday. They should have nothing but good things in their reports. These guys should never have had the chance to merge with Texaco, but they did and now we’re paying for it at the pumps(same goes for Exxon-Mobil ).
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Happy trading to all of you this week in the market. I hope this post gives you some insight and we hope to see you around again. If you have any comments or suggestions, please do feel free to give them.

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