Today, I am going to jump around a bit, which seems fitting as the market is doing the same these days …
Once again, the market is toying with breaking through resistance in key indices. The DIJA hit a high for the year last week and is now trading near a three-year high. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance. Can they break through? This week could be pivotal in this regard, so as I have been telling you, be prepared …
How do you trade or how do you interpret a stock that gaps up yesterday and today it gaps down? The stock is VZ.
I have a long and mixed results history with trading Verizon because the company has a mixed performance over the last few years. So, my interpretation of its gapping is that it tends to behave erratically, just as the telecom sector has behaved for a few years. VZ, though, is in a tough spot these days, as subscriber pressure and strong competition are forcing it to change its foci. It can no longer sit on its huge subscriber base and rake in the dough. Now it actually has to innovate or buy up, and it is finally beginning to get this. Behemoths are slow to move, but if they can get some momentum going, the movement is solid. Keep your eye on it but don’t expect it to change its behavior quickly.
We have money on the sidelines, if we wanted to invest it on Monday 4/25/11, what would you suggest that we do? We think there may still be some room for profit before QE2 ends in June. Thanks for your insight.
If you have been reading my column recently, you know that I feel the market is in a precarious place. The big worry for me right now is that Congress will fight about raising the debt ceiling. The rhetoric alone will cause some rippling in the market, but that is not the big worry for me. The big worry is that it only takes one nutty senator to filibuster the vote, and then … If we can get past this political juvenility, then I see some pretty clear sailing ahead, even with QE2 ending in June, and all indications are that it will, at least formally.
I doubt the Fed will stop stimulating the economy, though, as big issues still remain, such as the housing market (need to keep mortgage rates low) and the need for weak dollar (need to keep exports going). Nevertheless, the market has surely digested this. So, as the economic recovery goes, so goes the market. I am looking to a strong summer, especially if housing and employment pick up steam …
I just want to say that your comments today on TraderPlanet were knowledgeable and excellent, useful reading.
I am not sure which comments you reference, but a big THANK YOU for your compliment.
Trade in the day – Invest in your life …
