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It is Not Only About Us

January 4, 2012 – 6:02 pm

Despite better than expected car sales last month the stock market has decided to move downward. Worry over Europe weighs heavily on trader’s minds.

Improving U.S. economic outlook is fighting a battle with Europe’s worsening economic outlook while China’s economy tries to find a sustainable growth level. These major players on the world stage dictate direction and strength of stock market directions everywhere.

It is important to know what an individual company is doing in growing and earning money with profits at the center of their efforts, but without sustainable overall economic growth profits are harder to come by and traders and investors ultimately decide prices of stocks. If they are worried, stock prices go down, and at this point there is a lot of worry about Europe. The result is a stock market in the U.S. and in many markets around the world that are undervalued. Stock prices are low in historical terms when measured against earnings and earnings growth.

There is opportunity in this fear but it will be in the timing that will be difficult. Resolution in Europe of some kind will likely happen this year. When that happens, whatever shape it takes, will lie the greatest opportunity.

Good Trading
Steve Peasley

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