As usual, the coming week holds news that will move the market. We open today with manufacturing, income, and construction spending. So, I can say without hesitation that the market will move this week. As to the question below, well, that is another story all together, now isn’t it?
Simply, where do you see the market in the next 6-18 months and why?
The simple answer is that in 18 months, the market could be on Pluto or it could be closer to the center of the earth. As for the next six months, my take is just a bit different.
We are now forging through the churning of an economic cycle, and that cycle at some point will turn up decisively, meaning the employment picture will change, consumer confidence will change, and the hammered real estate market will begin healing. My guess is that the “turn” will happen closer to the end of the next six months, or soon thereafter, but certainly within the next year. The reason is this – overall inventories are once again nearing low levels, and that simply means we are now entering another inventory buildup phase of this recovery. Thus, if this turns out to be true, the market will lead the buildup by some estimate, say six to nine months, which puts us right where we are now – moving up.
In the next six months, the other variables, such as QE-2, the election, worries about uncertainty in the newly minted financial regulations, and the hubbub about healthcare will be less an issue for the media, if not outright passé, which means some other bugaboo will pop up to feed the manic/depressive appetite of the media. What the particular bugaboo will be is yet unknown, but I assure it will be something. But, if I am right about the economic upturn becoming more decisive, whatever the “hot new topic,” it will have to be pretty darn big to derail a market moving up from actual improvements in the overall economic picture.
On another important issue, I want to address the question below.
I am about to make the greatest decision in my life and trading career about a software product … The product will cost me all my savings, so I would like your independent professional advice if the product really is worth its cost … Please, your advice will be highly respected.
I excerpted the above from a longer question about a specific software package. I omitted the name of the product because in this situation, the name is irrelevant. What is relevant is that the reader plans to spend all of his savings on a tool. To you reader, this gamble might work if you are a skilled trader who can quickly master the software and start making money right away. It won’t work if you are looking for some magic that will deliver you money without having to work for it. Look carefully and with sharp clarity at your trading skill set. Be very careful about the choice you make here. Times are tough and nest eggs are oh-so important.
Trade in the day; invest in your life …
