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 9-03-2009
The market sold off for the third day in a row, in spite of the better than expected job losses. The ADP report shows job losses of 298,000 less than expected and the slowest in the last 12 months. Like the ISM numbers yesterday, things are getting less worse, and now the market is questioning where we go from here.
The ISM numbers at 53, meaning more orders placed than shipped, says things are coming back. However, to put another light on this, imagine the US economy was running at 100 mph. The economy has slowed for the last 18 months and is running at say, 30 mph. Now we are thrilled, that we have sped up to 31 mph.
The indexes are priced like we are running at 65mph. Therefore, we need a lot of gas to get there. That is the gamble in the market.
With September, being the month mutual funds sell their losers to avoid paying taxes, things could continue lower. It could be a good time to buy puts on some of the biggest losers of the last year.
GE dropped today, with the GEW UN puts closing over 1.00. Continue to hold.
On the other side, watch GLD again. It is worth buying a call option.
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