DOW near MARCH LOWS! Opinions?
Chart Gurus & Fundamental Gurus, What do you all think about market? Dow is nearing March lows.
How will you guys play the market from here?
I'm not buying anything today(I probably should, but don't feel like doing any homework). I didn't sell anything either.
I sold my 50 shares of BBY before they reported earlier this week for a very small loss. I'm glad I did. Long term I like BBY, but I didn't like the fact that they will invest 2 billion dollars in a company in the UK. I thought it was a mistake, so I sold. I'd avoid all retail stocks including walmart. I think the American consumer is tapped out for now with high fuel and food inflation. I'd still avoid the financials. I also don't like casual dining. I guess I'd still do what's working for now. It might not be a bad time to lighten up on winners and have cash ready. My biggest fear is if/when Israel/USA strikes Iran. I'm almost positive it will happen this year. You just wonder how Iran responds.
The only thing that has worked all year is commodities. I don't see that changing even though it actually pains me to say it (especially Ag stuff - grrr!). As long as commodity prices increase for fundamentals like oil, coal, steel, corn, potash, etc, companies are going to get hit on the cost side and their profits and margins can't do anything but sink. Earnings estimates continue to be too high, especially for discretionary spending related stocks since the consumer is screwed, and we can't have an economic recovery until the banks recover first - something which doesn't look like it will happen until about 2012! So in summary - we're f**cked! Dow should see the jan/march lows on monday (~11,700) - we'll see if that holds or we get complete capitulation.
I can't recommend Ag stuff here - the prices are crazy! Corn is in a huge bubble at the moment, although it might last several more months.
Oil is pretty overdone - it's hard to actually make money other than looking for speculative oils to play.
Coal is practically the only thing that worked today and the fundamentals of this will push it higher. It's scary getting in here though with the coal stocks all up ~100% this year. Just close your eyes and pull the trigger!
Solar will work sometimes but it's very volatile and maybe as overvalued as Ag - just harder to tell! Try to pick entry points carefully.
I don't want to buy gold - it's useless! But inflation is rampant and China oil costs going up will mean their inflation will skyrocket and they'll export it to us. So might as well get the IAU as a hedge against that.
If you have to buy a financial - GS is the only one. I think they'll make a lot of money off this commodity boom.
Even though we're clearly in a bear market, there are still stocks to make money off but if you're feeling really negative you could go with some of the ultrashort ETFs like QID, FXP, DXD, SDS, or SCC.
I've never felt so depressed while making money in a market. It just sucks!
Check my FXP thread, still looking for the market to decline a bit. Be on your toes...