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 9-23-2009
The market continues its climb, with the Dow gaining 51 points. In lock step, the dollar is continuing its decline. Gold is on a slight pullback ahead of the Fed meeting release Wednesday at 1:15.
All in all there is a lot of noise in this market with only one major question, ”What is fair value of the new economy?”
The rise, fall, and rise again of the stock market, is similar to the movement of a pendulum. At the 14,000 high, the pendulum was pulled to an extreme, and then released. As the pendulum swung back to the middle, it gained speed, and continued lower, over-shooting the fair value and stopped at DOW 6500.It then reversed direction from an extreme low. Now, the problem (question) is when it hits fair value will (or can) it stop, or will it overshoot again. Most likely, the momentum has caused it to exceed fair value. The question now is how much we will overshoot fair value before we start the next leg down. That is why the stock market is gambling.
Meanwhile, the market in front of us still wants to go up. I played the STEC option (SQR JF). I bought Monday At $2.05 and sold Tuesday for $3.05. The best way to make money in options, is to take quick trades, (1-3 days), and not let the time value drain your money.
GLD is the next play I am studying.
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