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 9-28-2009
The DOW sold another 42 points lower on Friday, to close at 9665. The verdict is still out on whether the up trend is over. The coming week has some of the most significant data of the month to shed light on the “recovery” of the US economy.
Monday has no data, Tuesday has Consumer Confidence. Wednesday has a number I like to watch, Chicago PMI, along with the Revised GDP. Thursday has six economic numbers, and Friday has the big employment numbers.
The jobs numbers should continue weaker, making the jobless recovery more likely. The gains in the stock indexes since March have correlated to the weakness in the US dollar, not in the return of our economy. GDP has declined 3.9% in the last year. It looks very unlikely the unemployment rate will improve for a number of years.
This may be a good time to take half your money out of stocks, and preserve some of the gains of the last seven months.
The market has a 4-year cycle that links with the Presidential term.
The first year of the Presidency is always volatile, sometimes up, others down. This is the honeymoon period. The President tries to fulfill campaign promises, tries to cut spending and decrease waste.
In second year of the presidency, the market is always down. This is the year a new President has to demonstrate his leadership ability and make the unpopular, but needed changes to the US economy and government. It is still too far from the next election to worry about popularity.
In the third year, the President realizes he needs to do what is necessary to be re-elected. This has historically been the best year to be in the market. This is when most of the money is released to create jobs, and make people feel they are better off.
The fourth year has been a difficult year for the market, as much depends on which party wins the election.
We are beginning the second year of the presidential cycle. I would advise everyone with money in the market, to look at a chart of the DOW or S&P for the last 40 years. The graph shows lows in 2006, 2002, 1998, 1994, 1990, etc. I do believe the next low will be in 2010, and then again in 2014.
Then, the next rallies will be 2011 and 2015.
Do your homework.
I sold the STEC call again for a $.40 gain ($400.00). The HOGS chart says the 12-13 level will be a target to buy.
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