Stock Market
All comments and Stock Market Analysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 10-20-2009
The market continues its march as earnings are blowing the doors off the estimates.
The market has left fundamentals in the dust, and the technicals are moving in to play.
What I mean by this statement is this: The earnings that correspond to current market value are a total guess. The market rally is projecting the economy is coming back, and will be firing on all eight cylinders. The problems of the last 18 months were nothing more than a bad dream.
At this point the game is much like Liar’s Poker, we do not know what the next two quarters have in store, but neither do the other players. The game is blind faith; your hand will play out in your favor.
The downtrend lines on all the major indexes are being tested, and the strength the market is showing forecasts the end of the recession.
History suggests the rally will continue for another 10%, the “end” of the current recession is here, and another quarter or two of upward movement. Then a new recession with at least a 50% retracement of the current uptrend and a focus on getting unemployment down back to 5%.
This will make the “W” bottom, and form the four-year cycle low due in 2010.
Play commodities (including gold), play the DOW stocks, and play Transports. The dollar fall will push the indexes higher, until we wake up and realize our dollar has lost purchasing power. Then we retreat.
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