Some of the pundits think so. The President spoke today at a quasi town hall event discussing the economy, taxes and the recovery efforts. Personally I believe these markets are now breaking out of its 4 month or so trading range and the shorts could also be scrambling and contributing to the breakout that’s occurring. One caveat here as it pertains to this strong rally continuing is the Fed which holds it policy meeting tomorrow. Whether this rally continues or we head back into the multi-month trading range we have been in depends on the fed statement that comes out after their meeting. If it is a none event then these markets can indeed continue higher in anticipation of the change that is coming in Washington, the possible delay of higher taxes and once again the low interest rate enviroment we find ourselves in.

Good luck to all and have a great week.

~George

With the way the markets are behaving you would think that the economy is expanding at a rapid pace and unemployment is low. Well unfortunately the latter is not happening yet. If you try to tie the markets and the economy together it doesn’t make sense, does it? So why the strength and resiliency you ask? My takeaway from the September rally and the most recent overall market strength  continues to be the low interest rate environment we find ourselves in and the constant flow of global liquidity being injected into the system. Now couple that with the anticipation of the mid-term elections and you have the recipe for a respectable rally.

For me though it does not feel like a real rally. Maybe the reasons for my feelings are the constant negative headlines that the media is obsessed with delivering to us? Or the coming out of the closet of the “high frequency” computerized trading systems which are seemingly making the markets even more lopsided for the retail investor? Or could it be that I need to see some real business leadership out of Washington? I don’t know what it is yet, but what I do know is when I hear stories that individual investors are piling out of the stock market for the above reasons or the like, that’s usually when the big boys are buying their stock.

I do the best I can to filter out the bias news and the incessant negative headlines that are being fed to us daily. Grant it a lot of the business and economic news is very real and needs to be considered accordingly, but not to the point where it freezes you. Now more than ever patience and prudence is required when navigating the market waters and once the right opportunity presents itself you must have the fortitude to act.

Have a great weekend 🙂

~George

The markets are continuing their upward trend albeit on relatively light volumes. Still a very positive sign for the bulls, but can it last? Well now Washington is talking about tax cuts for small businesses, why now? Could it be that the mid-term elections are right around the corner? Is there some sort of correlation with the most recent market strength and the upcoming mid-terms? You better believe it! In my humble opinion the markets are setting up for a Republican landslide in both the House and Senate. No matter what side of the aisle you are on it is rudimentary that you do not raise taxes when you are trying to ignite an economy. That said, whomever gets in don’t raise taxes, period! Give American businesses the proper incentives and confidence to grow their companies again so they can start hiring in a meaningful way.Washington also needs to give entrepreneurs the confidence to move their enterprises forward without the threat of higher taxes and mixed messages about business policies for this ilk can also create jobs.

I am hopeful that policy makers will ultimately get it right. One thing is for sure the American public will be crying out at the polls in less than 60 days.

Have a great weekend.

~George

In just the first 3 trading days of September the market has almost recovered all of its losses from August. As mentioned in my previous posts, we should continue to anticipate this kind of volatility. My expectations are that this type of market action should occur in an upward bias. Friday’s release of the August jobs report helped fuel this week’s rally by indicating that the private sector added 67,000 jobs which was 23,000 more than economists had forecasted. To see any kind of expansion in private payrolls provides hope that this economy is finding its footing. However, we are going to need to see multiple months of businesses hiring for this perma-bull to become excited about the economic recovery.

As Americans observing this Labor Day weekend, we must implore the leaders of this country to move aside their differences and political agendas. This is critical in order to put into place a real economic expansion plan to help our beloved nation and nations around the world grow again in a meaningful and consistent way.

Happy Labor Day 🙂

~George

Thank goodness last month is over. The S&P 500 lost 4.7% in August its worst drubbing in the month of August since 2001, however this did occur on extremely light volume. That said, a new month and new beginnings are upon us.  With 4 months remaining in the year and uncertainty abound couple that with one of the most important mid-term elections our country has faced in recent history, we should expect significant volatility for the rest of the year.

The market however seemingly is setting up for an upward trajectory. Yes a bullish call from this perma-bull. Let’s take a look – The technicals look poor, the fundamentals are fragile, the sentiment is sour with pessimism peaking  and the headlines are horrific. To me this a recipe that should favor the bulls and as counter-intuitive as it may seem this type of environment historically has been the perfect set-up for a rally, throw the mid-term elections into the mix and it potentially could become a barn burner. Stay tuned and good luck to all.

~George

A welcomed sight to see on Friday with the markets closing in the green and near the highs of the day. Call it short covering, you can blame the technicals or you can thank Chairman Bernanke for his comments which seemingly helped boost the markets. Whatever the case may be, it was certainly needed. August can be a very tricky month for the markets and thank goodness we are heading into the last week of it. As we approach Labor Day weekend let’s hope for a quite, subdued week ahead and get ready for what should be one heck of a close out to the year. Who knows what to expect and where we will be on December 31st, 2010 but one thing is for sure Washington and the markets should look very different 🙂

A great weekend to all.

~George

Okay we get it, the economy and job markets are upside down right now but do you have to constantly drill it into our heads? Is it just me or is this overkill? “Housing plummets, debts are at all time highs, Dow Industrials fall to 7-week low, Europe is crashing, Sovereign wealth funds  in trouble etc.” Look at these headlines, could you please give us a break? Does anyone ever talk about how there are 145 million people employed in this country? Does anyone ever talk about how consumer debt levels are dropping at record rates? Does anyone ever talk about how lucky we are to continue to have our freedom and liberties? Historically when it’s this negative and noisy out there we are either in an election year or we are bottoming, just maybe it’s both this time.

People do yourselves a favor and don’t get caught up in the constant doom and gloom that is being fed to us and let’s count our blessings for what we do have.

Humbly yours,

~George

Merger activity up ticked this week however the markets continue to focus on the short term data especially the jobs numbers. People seem to be forgetting that we are coming out of the worst recession since the great depression and the economy and jobs market still have a long way to go. Being obsessed over the weekly economic reports that come out which is then exacerbated by the media, is a recipe for a very emotional and volatile market. It’s utterly important to recognize that the recovery and healing is going to take time and let’s hope that governments, corporations and individuals alike will learn from the extreme leveraging and risk behavior that put the world economies at the brink.

We have come a long way in a mere 18 months with a lot more work to do. In my humble opinion the real work will begin once the mid-term elections are complete. There are plenty opportunities now and more to come in the future, but one has to be very patient and diligent when considering to act.

Good luck to all.

~George

In closing my last post my suggestion was to not panic, keep cool and read a good book. Well I have taken my own advice and I see that I have not missed much other than a 3% plus loss in the 3 major indices last week. The market has been flat out complacent and  boring pretty much across the board . My expectations is for this type of action to continue until after Labor Day, however when the markets do trade thinly like this any significant headline event could wake it up and create some opportunities. This period also presents the opportunity to reassess investing and trading strategies as the end of the year approaches. Good luck to all.

Have a relaxing week.

~George

Okay days like today can be hard to watch and swallow, tomorrow morning will be no better, note the keyword morning. All of today’s headlines were negative including the fed citing a slowdown but committing to incessant liquidity buy buying government debt,  the Bank of England echoing a similar sentiment and reports out of China showing slower industrial output. Holy cow no wonder the sky was falling today! Is this a surprise? Does anyone out there expect rapid growth or any real growth over the coming months or year for that matter? This perma bull doesn’t. In fact until there is pro business growth policies with conviction coming out of D.C.  don’t expect too much from the private sector.  With all of the real economic issues going on and the dire economic reports coming out and then the press pouncing on it, ensuing panic kicks in, hence todays market action.

In my experience when the sky is falling and panic sets in, you do the opposite. Do not get caught up in the hype of the world is coming to an end, just like you shouldn’t get caught up in the hype when the markets seem like they can go up forever. Point being, whenever I have allowed my emotions to run the show and follow the herd mentality, wrong decisions were made. We are in the dog days of August, this type of market action can happen in the dogs days of August. Not saying I like it, but cooler heads most always prevail. For me the real test will come after Labor Day and as we head into mid-term elections, so until then read a good book and keep cool 🙂

All the best.

~George