Stock Market
All comments and Stock Market Ananlysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 8-27-2009
The DOW closed up 5 points on average volume after positive news on New Home Sales and Durable Goods. We are in the heights of the summer doldrums, and still have two weeks remaining before the Labor Day holiday marks the end of summer and the return of traders and trading volumes.
There is more confusion on the trading floor, now, than at any time I have seen in the last twenty years. I have heard the current market being compared to the late 1999 market. At that time, Y2K was the concern, and the future was very unsure, but the market traded higher through 01-01-00 and into March 2000.
Today’s market is riddled with questions regarding the health of the economy, and whether we have come too far too fast, or we are just beginning a return to prosperity. No one has a clue what a stock is really worth.
The financials are the key. They have been bought since the March lows, and appear to be a value even at today’s prices. Yet, nobody knows what makes them different today than in March. See the Rolling Stone article claiming Goldman Sachs rules the world (Rolling Stone and the Great American Bubble Machine).
The common sense approach to the market says we are way ahead of the return to economic health.
BUT, the financial community, headed by GS, will orchestrate big gains as they pull the masses back into this lottery called the stock market. Only to have them (the masses) buy another losing ticket in the retirement lotto, and have the US government print another few trillion dollars to buy their silence, as we continue to operate without a balanced budget. Who says Madoff had the biggest Ponsi scheme? What do you call running printing presses to make dollars to pay bills and skipping the work necessary to give value to these dollars?
The sensible approach says we have a double dip recession, and 5 or 10 years of up and down moves in the market, while the economy dictates market prices based on current company performances.
We will have to find our place next to our new world partners, (China, India, Brazil, and Russia), before the US dollar goes the way of other failed currencies. And we will have to return to the values that built this country.
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