Today's Market
by Dr Invest


First, the good news. The Eurotribe has come up with a plan to insure that banks will have enough money until 2013 to continue doing business. Elated hearts, filled with glee, are now showing their trust by bidding up the stocks with the S&P rising some 8.7% since October 4th, the DOW now up some 7.3%.

In case you are thinking I am disappointed in this sudden rise, I am not. But if you think that the basic economic problem has been solved, you are frightfully wrong. KICKING THE CAN DOWN THE ROAD best describes the action taken by the Eurotribe. Make no mistake, the problems in U.S. economy have not been resolved and this action by the Eurotribe has not resolved the economic problem. Bernanke reported to congress that by 1st quarter in 2012, we would be teetering at near recessionary levels. The Eurotribe promise to cooperate in providing liquidity for the EURO has raised the value of the EURO against the US dollar, but when the time comes to cover failing European banks, politics may dictate how deeply a country's citizens will be taxed to pay for a far-away country that is not paying their fair share.

Since recessions/depressions average 9 to 14 months, KICKING THE CAN DOWN THE ROAD is a way of thowing down a banna and hoping that the 200lb. gorillia will find a cozy corner to eat take a nap without wrecking your house. What QE-1 and QE-2 has proven, is that you can't stimmulate your way out of a recession; although, you can prolong it. One noted economist observed, "It still feels like a recession.". And that's because it is.

Making Money In A Recession

Even in a recession, the market will have seasons in which it can grow. The Eurotribe has given us a nice early Christmas present. Believing that Portugal, Italy, Ireland, Greece, or Spain will be covered by the Eurotribe if they default, takes pressure off the market at least until the end of the year.

I would not go an put all my money into stocks at this time, but I would look for the 20, 50, and 100 day moving averages of a stock to determine if I could make a little money before the end of the year.

My Plan

I am watching the DOLLAR STORES for this season. Is their value consisently rising? Has the rise in price occurred over the past 20 days, 30 days, 50 days? If so, at what price do I want to enter a trade? How much would I be willing to lose? What will be the point at which I will set my stop-sell?

In this market, you want an EXIT STRATEGY. I don't see the DOLLAR STORES remaining viable after January, but who knows. Setting your STOP-SELL will guarantee that you don't hold the stock too long.

Here are some possible stock symbols to look at: DLTR, DG, & FDO. (Dollar Tree, Dollar General, & Family Dollar) Here are three other favorites that I am looking at CATM, PETM, and COST. Should these continue to rise over the next 10 days, my interest would be perked.

My Caution

Germany and France DO NOT HAVE A PLAN, there is only a PROMISE that they will work on a comprehensive plan. Furthermore, we don't really even know how the plan would work. Can you see any reason why the stock market rose 330 points? A promise is not marriage! So there is big difference between a promise and a contract. Before making a commitment to buy a rising stock, I would want to see the promised plan by the Eurotribe.

(note: The above article is for entertainment purposes only and not to be used to make any financial decision.)