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| Even this little guy is scratching his head over this market action. |
The media pundits always like to give an explanation for everything that happens in the markets, but today, even the most creative reporter would have trouble making since of the action we are seeing. The DOW is up 116, S&P 500 is up 14.20 and NASDAQ is up 30, but JP Morgan Chase & Co. (JPM) and Intel Corporation (INTC), both of whom kicked off earnings season with strong reports, are on lows, down 0.44 and 0.38, respectively. I bet we will see many headlines at the end of the day that point to Intel (INTC) and JP Morgan (JPM) as “catalysts” for today’s action, but the stocks themselves are negative.
The overarching theme is that right now the market is in a tricky spot. The S&P is at pretty big resistance in the 1185-1188 area. Our calls are hitting targets: Gold hit $1375/ounce, Apple Inc. (AAPL) is over $300, Wynn Resorts, Limited (WYNN) surged above $103, and General Electric Company (GE) made it above $17.45. Now is the time to be very stock specific and not fall asleep behind the wheel if your fully invested. Don’t fight the trend, but don’t chase either. There are opportunities to buy pull-back and you must have the patience to wait for them.
On another note, Rep. Maxine Waters was on TV this morning saying that homeowners were “tricked” into buying homes and there needs to be a complete foreclosure moratorium. But, at the same time, we also need to prevent massive losses from big banks that could necessitate further government intervention. First of all, those two items are mutually exclusive. Secondly, the irresponsible home buyer must share responsibility for this crisis. A disaster on such an epic scale is not possible without willing participation on both sides. Didn’t the “dweller” stop paying their mortgage? Didn’t the Community Reinvestment Act say all of these individuals should own a home, and banks will be penalized th if they don’t have enough equal-opportunity loans on the books?
The President continues his assault on the private sector, and more recently on the Chamber of Commerce. His energy should be spent addressing joblessness in our country. He consistently attacks Wall Street, but wants the stock market to perform in order to save the bloated pension system. Doesn’t he realize we can’t allow that these Cadillac pension plans that are not adequately funded by participants who contribute 100k over the course of their employment and then are promised 2.8 million in payout over retirement? Where does that money come from?
There is my mini-rant of the day, glad I got that out of my system. The bottom line is that with the foreclosure fiasco, the imminent pension problem and the foolish Fed, our country is in a tangled mess and digging a deeper hole. Right now I don’t feel we have the visionary leaders capable of leading us into a new era of prosperity. As a market participant in this environment, you must stay nimble and agile to take advantage of each opportunity as it comes, without being exposed to large degrees of risk.
