I hate to embarrass my friend and colleague Andy, but he’s easy to pick on. The fact is, while most people in my company regularly buy stocks, he hasn’t done so for over a decade. He’s an anomaly, and we give him a hard time.
That is until we saw how much money he makes in the markets. Last week, he made over 47% gains – which turned his $3,000 investment into over $4,400.
So, I’m excited to announce that I’ve asked Andy to show Daily Profit subscribers how he does what he does. This weekend is your chance to find out. Just click here to sign up (for free) for an event Andy’s hosting. That’s when he’ll reveal his methods to me and everyone else.
European leaders have a meeting scheduled today to discuss Greek debt. What a novel idea.
It’s becoming increasingly likely that Greece will default on its current debt obligations. Germany just doesn’t seem to have the will to continue with bailouts. Without new funds, from bailout loans or a higher taxes (which Greek citizens are protesting) Greece may run out of cash in October.
So, if there is going to be a default, it’s coming up quickly.
I’ll reiterate my thoughts from yesterday. Greek default should be expected to push stocks lower. This should be a good buying opportunity. And there’s no real reason to buy ahead of this event, especially as it becomes more likely.
But once it occurs, we should be poised for decent year end rally.
Retail sales were flat in August, after a 0.3% rise in July. That’s clearly not being interpreted as a negative by the investors. It could have been worse.
While high unemployment isn’t helping, consumer confidence is taking a major hit these days. A Bloomberg poll shows that 72% of Americans think the country is in the wrong course. And given the utter stagnation in government, it’s not surprising.
Here’s one ironic note: 57% of those polled believe that the best way to create jobs is to cut taxes and government spending.
Taxes, maybe. But government spending? There should be absolutely no doubt that cutting spending will raise the unemployment rate, not lower it.
I want to be clear that I’m not advocating more government spending. It’s clear that spending levels are out of touch with fiscal reality. And it’s unfortunate that much of the stimulus spending we’ve seen that’s contributed to current deficits has been misguided. It’s hard not to be skeptical of Obama’s jobs bill.
At the same time, now would be a good time for a little kickstart to the economy. Low growth rates are also not helping confidence, nor are they helping the unemployed.
Technology and financials were your market leaders yesterday. This is as it should be. Conventional wisdom says the financials lead in the early stages of a rally. But as I’ve stated, I’m not too excited about a rally until we get clarity about Greece, one way or another.
I asked TradeMaster’s Jason Cimpl for his thoughts on the where the market is headed next. Here’s what he had to say:
Over the past three weeks I have spoken about how important the 1175 area is for traders. Which ever group, bears or bulls, that successfully controls 1175 will be able to dictate the short term trading trend.
Last week the bulls lost the 1175 support area, and SPX quickly fell to 1135. Now bulls need to fight hard to get it back. And should they take it out, SPX could be on its way back above 1200. On the other hand, the bears must show some defense of that 1175 zone today if they are to take the market lower this month.
I favor the bulls, and another trip back to 1197. But I’ve increased all of our stop losses in case the bears show-up in force today and prevent a break out past 1175. If the bears are able to protect 1175, SPX is headed for 1115 – and our portfolio, with five open long trades, would be negatively impacted by such an event.
Like Retail Sales, the Producer Price Index (PPI) also came in flat for August. Inflation is basically non-existent right now. There’s no doubt that will worry the Fed, but I doubt it will act with more stimulus anytime soon, at elast not until we get clarity on the jobs bill.