Stock bulls are ready to go higher?
Posted by Frugal on April 18th, 2008
I have said back in late March that the worst is probably behind us for this year. As the days go by, there has been an obvious bullish tint day in and day out. Are the stock bulls ready to go higher? Have the brokerages finished their accumulation?
In the emerging market land, India’s uptrend is not broken, and is turning higher. Taiwan’s going higher after political dusts settled. EEM is still in a good uptrend. Shanghai’s market appears to be making an interim low right above 3000. The obvious question then is whether the thesis of global synchronized slowdown is still correct. By all means, these stock markets are not breaking down. Plus that the commodity markets are still very hot both in futures market and respective stock market, maybe and just maybe that global economy is going to escape from all the gloom (temporarily).
If that is indeed the case, US stock markets should also be turning higher. I’m not too sure about the intermediate fate of $US, which seems to be the odd piece of the puzzle that just doesn’t quite fit. $US seems to be making a bottom here. If it turns up, US stock markets will have a harder time to rally. The same will hold true for mining stocks and precious metals.
Could it be that we will have another temporary pull-back along $US dollar rally, with another correction in the commodity bubble, before really breaking the resistances on charts?
For now, the bullish undertone is still fairly clear. HOG warns, but drop a little. GOOG went up by 17% in the after-hour trading. Markets are reacting to the negative news fairly well. Everything seems to be pointing towards positive technically.
If you’re short of this market, I strongly advise to cover them. Yes, the financial crisis is not over for sure. But a brighter near future seems to be temporarily here.
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April 20th, 2008 at 12:40 am
Dude, if you’think’ the worst is behind us, then, pray tell, what is the US going to do with 20,000-40,000 new foreclosures every month? Where are you going to create a huge new pool of qualified (key word) buyers, when the banks won’t give a mortgage out without a triple A credit rating and income verification? Also, explain why, here in New Jersey, on highway frontage, (Route 22) that all of the big box retailers that went out of business, all those stores are remaining vacant? Here’s what I observe just driving a few miles. OfficeMax closed ALL their NJ stores and the stores (2 that I pass on the highway) have remained vacant for over 2 years. CompUSA, closed ALL their stores. The one I pass by (route 22, highway frontage) is still vacant. Levitz funiture, bankrupt, stores remain empty. Babies R Us, store remains vacant. There are also huge retail stores that have gone out of business and remain vacant for months on end. Soon, with all the excess shopping mall square footage coming up, there’s going to be major vacancies at many malls thoughout the US. And you think that this is going to get better? No way dude, I lived through Resolution Trust. When you see million dollar plus homes boarded up in exclusive neighborhoods, then something is severely wrong and this can only get worse by the day. Go read ‘real estate’ on www.dollarcollapse.com