Today's Market
by Dr Invest
Promises, Promises! Once again, the market rises upon the hopes that Bernanke MUST stimulate the market. Wall Street just can't get this idea out of their head. Billions will be lost on the gamble that Bernanke must stimulate the market in August. Investment firms are so desperate to show gains, at the slightest indication of positive news, money rushes into the market. Since the middle of April, Wall Street has been calling upon Bernanke to stimulate the market. Each month the market has risen upon the speculation that Bernanke would stimulate the market and then the market would fall with the loss of billions of investor dollars.
This call for stimulus repeats itself each month with the total market buying billions of dollars worth of stocks in anticipation of a significant rise in the value of stocks. This stimulus may come just before the election, but only with there is a significant decline in the market.
Getting A World-view
The problem is that there are significant signs of a world-wide recession. I'm being kind here by not using the word DEPRESSION, but even mainstream economist are now admitting that financial crisis could be a foot.
According to CEO and Chief Global Strategist of Euro Pacific Capital Peter Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse. Please get the full story at: http://finance.yahoo.com/blogs/breakout/america-heading-towards-collapse-worse-2008-europe-says-155504860.html
DEATH CROSS
A death cross is when the 50 day moving average moves BELOW the 200 day moving average. This isn't always the sign of a BEAR MARKET, but most of the time it marks the begining of a downturn. I would expect this downturn in August or September. We have had an unsually difficult season with losses begining early in the summmer and the losses falling below the 30 year seasonal trend chart. The "death cross" or "golden cross" is not something to toy with and if you are in stocks or investments tied to stocks, you will need to be concerned.
For me, I'm not utilizing a BUY AND HOLD method so I'm not greatly concerned. But if the DEATH CROSS is indicating a downturn in stocks, you could see losses of 30 to 40%.
The green line represents the 50 day moving average and the trajectory seems to be headed toward a cross. My best guess is that the Death Cross will come somewhere around the middle of August give or take two weeks. Still, you need to know the term: DEATH CROSS. And you need to know that it indicates a potential downtrend in the near future.
Calming Thoughts
Our investment strategy is not going to be changed by temporary moves in the market. We have made careful investments for our BOND PORTFOLIO with TIP and BND exchange traded funds. We have determined that if our investment falls below 3% of the closing price, set on the first of each month, the STOP-SELL will be activated. Stocks will be considered, but only after October 29th; and then, only if the market is in an uptrend.
As in every investment, rule one: don't lose money; rule two: remember rule one. I'll never forget some advice given by Lousie Yamada, "Its better to be out of the market wishing you were in, than to be in the market wishing you were out." Keep to the plan and be patient where you are the most likely to make money. Be patient, your disciplined investing will reward you and protect your portfolio.
(Note: the above article is for entertainment purposes only and not to be used as investment advice.)
by Dr Invest
Promises, Promises! Once again, the market rises upon the hopes that Bernanke MUST stimulate the market. Wall Street just can't get this idea out of their head. Billions will be lost on the gamble that Bernanke must stimulate the market in August. Investment firms are so desperate to show gains, at the slightest indication of positive news, money rushes into the market. Since the middle of April, Wall Street has been calling upon Bernanke to stimulate the market. Each month the market has risen upon the speculation that Bernanke would stimulate the market and then the market would fall with the loss of billions of investor dollars. This call for stimulus repeats itself each month with the total market buying billions of dollars worth of stocks in anticipation of a significant rise in the value of stocks. This stimulus may come just before the election, but only with there is a significant decline in the market.
Getting A World-view
The problem is that there are significant signs of a world-wide recession. I'm being kind here by not using the word DEPRESSION, but even mainstream economist are now admitting that financial crisis could be a foot.
According to CEO and Chief Global Strategist of Euro Pacific Capital Peter Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse. Please get the full story at: http://finance.yahoo.com/blogs/breakout/america-heading-towards-collapse-worse-2008-europe-says-155504860.html
DEATH CROSS
A death cross is when the 50 day moving average moves BELOW the 200 day moving average. This isn't always the sign of a BEAR MARKET, but most of the time it marks the begining of a downturn. I would expect this downturn in August or September. We have had an unsually difficult season with losses begining early in the summmer and the losses falling below the 30 year seasonal trend chart. The "death cross" or "golden cross" is not something to toy with and if you are in stocks or investments tied to stocks, you will need to be concerned.
For me, I'm not utilizing a BUY AND HOLD method so I'm not greatly concerned. But if the DEATH CROSS is indicating a downturn in stocks, you could see losses of 30 to 40%.
The green line represents the 50 day moving average and the trajectory seems to be headed toward a cross. My best guess is that the Death Cross will come somewhere around the middle of August give or take two weeks. Still, you need to know the term: DEATH CROSS. And you need to know that it indicates a potential downtrend in the near future.
Calming Thoughts
Our investment strategy is not going to be changed by temporary moves in the market. We have made careful investments for our BOND PORTFOLIO with TIP and BND exchange traded funds. We have determined that if our investment falls below 3% of the closing price, set on the first of each month, the STOP-SELL will be activated. Stocks will be considered, but only after October 29th; and then, only if the market is in an uptrend.
As in every investment, rule one: don't lose money; rule two: remember rule one. I'll never forget some advice given by Lousie Yamada, "Its better to be out of the market wishing you were in, than to be in the market wishing you were out." Keep to the plan and be patient where you are the most likely to make money. Be patient, your disciplined investing will reward you and protect your portfolio.
(Note: the above article is for entertainment purposes only and not to be used as investment advice.)
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