My birthday is January 21, so that puts me directly on the cusp in astrological parlance. I am an Aquarian with Capricorn tendencies. Okay, okay, no one really cares about my astrological sign. In fact, I don’t even care about it, but it seemed like an interesting way to introduce my topic today, which is the economy.
The global economy and our economy (the economy) are on the cusp, the cusp of actual recovery. Perhaps you think this a bold statement, as you might fall in the bearish camp, which believes that all of the problems out “there” will force the economy into a double-dip recession. Then again, you might fall into the bull’s camp, which believes that a V-shaped recovery is in place, and we will see sharp improvements in the near future.
I am by nature a centrist, so I do not subscribe fully to either extreme. I believe we are on the verge of a strong recovery, but it will take some time. I do not believe the economy will completely breakdown, as some doomsayers are predicting. We will experience a bumpy road for a while, but we will work through the problems, which include the bottoming residential, real-estate market, access to capital in the commercial real-estate market, the Feds quantitative easing, and the European fiscal issues. These, I believe are short-term problems that we will get through sooner rather than later. Yes, each will take some time, but all are solvable. In my mind, unemployment and China loom larger regarding impediments to a quicker recovery.
It may take some time to recover to normal employment, but it will come. In fact, look to the March employment report coming soon to see what I mean. I believe we will see a sharp turn around that will signal to the market we are headed in the right direction.
China, however, is a dark cloud. If it doesn’t do enough to reign in its overheated economy soon, global inflation and that “double dip” I mentioned earlier might become reality. If it can reign in its economy without collapsing it, no worries. In fact, if it is successful, a strong global economic recovery will come sooner, rather than later.
The other issue hanging over us is the U.S. debt. This, of course, could turn out to be a huge inflationary issue, but is it really a problem now? I don’t believe it is, and neither does the market, apparently. As unlikely as it seems now, the administration and the Congress will go after the deficit, which will result in long-term debt reduction. They have no choice.
The point is, at least for a while, the economic picture will stabilize, which means opportunities to make money are here. Whether you trade forex, stocks, commodities, futures, or options, positioning is the key. Find the markets that will move forward. One example is the technology sector. Check it out.
Anybody have a thought on this?
Trade in the day; invest in your life …
