Today’s Stocks & Topics: How to get in to the market, (ALGT) Allegiant Travel Co, (DEO) Diageo P L C, Stocks, (CTL) Centurytel Inc., IRAs, (FHY) First Tr Strategic High Inc., (ABK) AMBAC Inc., 401K.
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We have seen weak economic statistics this week while at the same time the stock market rallied. Why? First, the economic numbers were not as bad as expected. GDP was down .3% for last quarter but the expectation was for .5%. Housing prices were down for new construction but inventory shrank at the same time sales jumped. Consumer spending fell when adjusted for inflation. Not adjusted it was up slightly. Inflation for September was still strong but oil prices have fallen dramatically so inflation is going to ease in coming months.
Yes, the economic news was not good but stock prices have fallen so strongly that they reflect an economy that is in a free fall and it appears that instead we may only enter a normal recession. If that is true stock prices are at bargain prices.
Will all the efforts of all the world governments to save the financial system work? If your answer is yes, it’s time to invest; if no, then stay out.
Good Trading
Steve Peasley
Today’s Stocks & Topics: (CHK) Chesapeake Energy Corporation, Cash, Shorting, 401k, (FDG) Fording Canadian Coal Trust, The Economy, Preferred Stocks, (LG) Laclede Group Inc., (BRKB) Berkshire Hathaway Inc Del.
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Today’s Stocks & Topics: (HTM) U.S. Geothermal Inc., Natural Resources, (FSLR) First Solar Inc., LIBOR: London Interbank Offered Rate, 401k, (ENER) Energy Conversion Devices Inc., Retirement, The Stock Market.
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A 10% rally in one day is not only unusual it’s unheard of. We are in a time when all standards of market movement and evaluation are no longer considered. This is a sign of Fear and Greed in control. At some point we will return to normal valuations and stock market movement but for the time being we have to recognize what is reality at this time.
The stock market misplaces values often both on the up and down side. Yesterday’s movement is a market that decided that fear pushed prices too low and once there was a hint of a snap back from an oversold situation those people that were expecting more downside got caught in what is a classic short squeeze at the end of the day. That means they had to ‘buy’ stocks to get out of their bet against the market. As they bought shares it pushed the market even higher.
Since there was no news to cause this rally it makes me feel that we are seeing some strong signs that the market is trying to put in a bottom. However, we will only know that in hindsight.
Good Trading
Steve Peasley
