Stocks have traded in a pretty tight range over the last several sessions. There’s been an appearance of weakness, and some comments from talking heads that a correction is coming, or may have started. It’s sure not looking that way today.
Stocks are big in the early going. The sell-off in China I mentioned the other day has reversed. All the talk of an imminent overheating of China’s economy now sounds like a deliberate attempt to work stocks lower so dips could be bought.
There should be no doubt that games are being played right now. Shenanigans, as I like to call them. But it’s also true that economic recovery is an unknown entity: we don’t know what’s going to happen, how robust the recovery is and what the upside may be. That’s why the shenanigans work.
Just this morning, new jobless claims came in higher than expected. That’s bad news. But stocks are up big. Many of the ongoing conditions of recession are being discounted because it’s widely believed that the economy has bottomed. Some believe the recovery that’s going on right now will show up as a surprise number for the third quarter GDP.
*****So that suggests that today’s poor unemployment number will soon be a stabilizing, or even improving number. Yesterday’s bad durable goods number will be the bottom of the cycle…
Is the market being set-up for a massive disappointment? You bet it is. Will that disappointment materialize? I don’t know.
That leaves me, and other investors, in a difficult spot. So, I’m going to continue to do what I’ve been doing – buy quality stocks in the sectors that make sense, watch them like a hawk and take profits. That approach has worked extremely well in all of my advisory letters.
*****I haven’t mentioned my Recovery Portfolio lately. I’ve added a couple stocks over the last few weeks and just closed a covered call trade on Chesapeake Energy (NYSE:CHK). We made 21% and 25% in four months on a very low risk investment. I’m lining up my next covered call trade, to learn more about Recovery Portfolio, click HERE.
*****Daily Profit readers are the best. Your response to the T-shirt contest I announced yesterday to get the word out on my first book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks, was outstanding. And I didn’t even give you all the details!
First of all, I neglected to include the link to the SmallCapInvestor Facebook page. Click this link to check it out.
I also didn’t mention that everyone who submits a T-shirt slogan will get a 30-day, 100% complimentary trial to my SmallCapInvestor PRO advisory service. Or that the winner gets a one-year subscription to ALL of my advisory and trading services ($2,680 value), plus a signed copy of the book and three t-shirts.
And still, you stepped up to help. Thanks again for your overwhelming support.
I will be taking submissions for the T-shirt slogan until August 9, 2009. Submissions can be made at Facebook or via email ([email protected]). All email submissions will be posted on Facebook and that’s where the voting will take place.
*****It’s pretty clear now that the trends we’ve seen emerging from the financial crisis and recovery will be with us for a long time. I’m talking about high unemployment, higher taxes, a weak dollar, restrictive regulations, and potential inflation, just to name a few.
Clearly, these conditions will have a profound effect on your investments in the months and years ahead.
And because many of these conditions are a direct result of government bailouts, I’m calling the condition Managed America.
We’ve just completed the update to the Predictions 2009 special report (I mentioned it last week, click here if you need a copy). The report does a cursory review of the past few months and the investing strategy that made big gains for Top Stock Insights subscribers.
More importantly however, the report reveals our investing strategies for the remainder of 2009 and beyond, and explores my concept of Managed America and how you can still make profitable investments. The U.S. economy has changed and investors need to understand the changes in order to make the best investments.
To complement the report, I’m hosting a web video conference on Monday, August 10th at 6:00 p.m. to go over the major themes of Managed America and how you’ll make profits from this new economic reality.
The event is free, but you do need to register for it. Click here for the free registration page now to make sure you’re on the list to attend.