Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Powering Ahead With Significant Momentum

Stock-Markets / Stock Markets 2010 Nov 08, 2010 - 03:19 PM GMT

By: Christopher_Quigley

Stock-Markets

Best Financial Markets Analysis ArticleThe market continues to power ahead with significant momentum. The Dow 30 Industrials, the Dow 20 Transports, the S & P 500 and the NASDAQ 100 all are taking wind from a new quantitative easing policy, extended Bush tax breaks and positive earnings guidance. In addition Wall Street likes the idea that Democrats and Republicans must work together and compromise following the mid-term Congressional elections.


There is of course another factor influencing the positive trend. Given that current interest rates are near zero the only way bond rates can go is up. Rising rates will herald an end to the extended bond market rally we have witnessed over the past years. Smart hedge managers are reading the change and are moving ahead of more cautious mutual fund players. Should this capital re-allocation strategy become more pronounced, good times could finally arrive to beleaguered equity managers. Remember the stock market has ambled range bound since 2001. It is thus well in line for major price movement particularly when you factor in the inflation multiples which will eventually kick in to common price levels  as a result of quantitative easing dollars moving out from financial balance sheets and into the broader economy.

Since September our recommendations have done fabulously well.  Silver (SLV) is up 36%, Gold (GLD) has gained 10%  and our emerging markets ETF (EDC) has advanced 70%. Long may it last. I recommend sticking with these momentum trades until their 20 DMA’s are significantly broken on large volume. I do not believe we will see that soon. If anything I reckon those investors who are out of the market may find it difficult to find a safe entry point until the earnings season in early 2011. But traders should not be disheartened. The market eventually always retrenches. I am a great believer in waiting for a technically sound purchasing position. Patience will always outlast recklessness. In other words never chase “Mr. Market.” For those who are looking for an investment “target” that has not run too far from a conservative technical range I recommend consideration of USO, the oil investment vehicle. This ETF is significantly off its 2008 high of 103. It currently trades around 39.50. Should it break the 41 dollar level it will be a definite buy and could go all the way to 120, in 2011 and beyond, should the bull perception begin to consolidate.

On the value front there have been great results from our watch-list candidates. To name a few: Western Digital (WDC) is up 41%. Monsanto (MON) has risen 29%. The Blackstone Group (BX) has gained 40%. Southern Copper (SCCO), a company that actually pays a fantastic dividend, has increased 50% and Telefonica (TEF) has advanced 35%.

Observing  price action broadly across the market-place the message I am getting is that the worst is over, short term, and that the bull trend is growing in energy and power. Extended and compressed high stochastics are a feature of bull markets and that is what we are experiencing. The final leg to the “Bull” stool would be for the bottom to be finally set for the Real Estate market. My property contacts in Florida tell me this may not happen too soon given the complexity of the crisis but the current “mixed” real estate story has a silver lining. The FED will not raise interest rates aggressively until bank balance sheets have stable “mark-to-market” property valuations. When that happens stock market advances will begin to be tempered by rising interest rate trends, but we are not there yet. Thus as long as monetary policy continues to be accommodative I see no reason why Wall Street will not enjoy a traditional “happy” festive season and a New Year that beckons “new hope” and higher prices. Thus the traders mantra will not be “buy low and sell high” but “buy high and sell higher.” The wall of worry has arrived. The easy money has been made.

ETF: USO. Weekly


ETF: GLD.  Weekly


ETF: SLV. Weekly


By Christopher M. Quigley
B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin and holds a Batchelor Degree in Accounting and Management from Trinity College/College of Commerce, Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the Stock Market in 1989. in Belmont, California where he lived for 6 years. He developed the Wealthbuilder investment and trading course over the last decade as a result of research, study, experience and successful application. This course marries Fundamental Analysis with Technical Analysis and focuses on 3 specific approaches. Namely: Momentum, Value and Pension Strategies.

Mr. Quigley is now based in Dublin, Ireland and Tampa Bay, Florida.

© 2010 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in