Today's Market
by Dr Invest

Well, the markets sprung to life today by the mere hope that Bernanke would implement a new plan tomorrow, called: Twist and Shout!

Really?  Mr. Bernanke, is this going to actually change the structual problems with the economy or simply raise hopes, so investors will put more money back into the market? Oh, the market is drunk on the news of a new infusion by the Fed. Soaring to dizzying heights at the news of yet another intrusion into the market, the traders came to their senses by the end of the day with the DOW JONES gaining only .07% and the NASDEQ and S&P falling slightly into the red.

Why more stimmulus? Why tweek and manipulate the market yet again? Listen my friend, there are real concerns about Greece, the EURO, and default by PIIGS. (Portugal, Italy, Ireland, Greece, and Spain) The FED has already promised stimmulus help to some of the banks in Europe, using the taxpayer's money from the U.S. The FED is genuinely concerned about the collapse of the EURO, affecting our own economy and subsequent economic collapse.

At this time..... JUST STAY OUT OF THE MARKET!

STAY OUT, BUT KEEP LOOKING AHEAD

There are some things that need to happen before buying a stock. First, a consistent and predictable rise in the stock price; Second, a decline in the immediate risk to investing in a stock; Third, a buying opportunity for the stock; Four, a clear exit plan for selling the stock.

Listen carefully, DO NOT BUY NOW! Since mid-October is an opportunity to buy, I want to see if there is anything that is a BUY. These have to be stocks that are shock proof and predictable.  So I am going to start watching. Here are just a few stocks to start looking at now. But don't buy them now, just because the price is rising, wait until they have at least 20 days of higher highs. (XYZstock opens at $12.90 and closes at $13.10, the second day it opens at $13.10 and closes at $13.30 and so forth.)

COST - Costco Wholesale, is a competitor to Sam's Wholesale. In a depression, where will people shop? Yes, that's right! Where they can get the best prices. Costco carries a wider selection that Sam's. Get a quote on COST for 1 month,  3 months, 6 months, and a year. Is the 20 day moving average going up? This will tell you the trend. What about a 50 day moving average or 200 day moving average. Do this with each stock of interest until you feel certain that your investment will return a profit to you. (If you invested $10,000.00 in XYZstock at $12.90 per share, what would XYZstock have returned to you 20 days later? Or 50 days later? Or 200 days later?) This kind of back-testing is the gold-standard to evaluating a stock.

DG - Dollar General should succeed for all the reasons as Costco Wholesale. FDO-The Family Dollar Store is also a contender, but less-so than Dollar General. Should DG stock remain strong, I want you to think...HALLOWEEN, THANKSGIVING, CHRISTMAS, and NEW YEAR. This past week, while standing in line at a Dollar General, a teacher in front of me purchased 30 black plastic buckets and items to decorate those buckets for Halloween. This is not great analytics, but multiply that purchase by 8,000 stores.

PETM - Pet Smart is where you can get anything for your pet, including the pet. Every dog needs a Haloween outfit. And one thing I noticed about Pet Smart stock is that in 2008 it was hardly changed by the market downtrend. See, people are not going to let their pets starve or go without. I think out of all of the recommended stocks, PETM may the most solid performer.

CATM - Cardtronics places ATMs throughout the world. They have had consistent growth and the projected growth remains strong. Again, think...Halloween, Thanksgiving, Christmas, and New Year. People will be out, people will need money.

What we are looking for are the 20, 50, 100, and 200 moving day averages, which tell us if the stock is consistent and predicable. You want to know that if you put your money at risk, there is a likelihood of a return.

Even if you buy a great stock, a sudden drop in the over-all market could sink the stock you have invested in. If there an impending war or the possiblity of a world-wide economic collapse, it will ruin your potential for profitable returns. These are immediate risks to your investment. Don't put your suitcase of cash in a building that looks like it might burn down.

The "immediate risk to your investment" is of concern at this moment. All of the above stocks show consistent and predictable returns for the past month, but the larger world-economy is in danger of collapsing. That is why even with good stocks, you might not want to take the risks of being in the market right now.

These stocks will grow over the next three months, but a sudden downturn in the EUROPEAN or ASIAN markets could destroy your gains and even put you into the negative. For now, DON'T BUY, JUST WATCH.

(note: The above information is for entertainment purposes only and not to be used for any kind of investment decision.)