Tuesday, June 7, 2011

Don't Get Scared; Buy The Dip This Week

We should get a rally Tuesday.  Both Madmoney and Fastmoney were negative last night.  Almost without fail, when both segments have the same strong sentiment on the same day...the market goes contrarian on the following day.  In the long term scheme of things this contrary play is meaningless, but for the immediate short term you can make some dough.  Futures are already gapping up huge.

The market is now very very oversold in the intermediate term as well and a reversal could be at hand any day now.  The risk/reward doesn't favor shorting stocks here. 

Q2 is about to end at the end of this month.  It's likely why market participants have been jittery lately.  We probably don't need Q3.  The full effects of Q2 hasn't been felt yet until about 12-24 months later, which means the stock market will be on massive nitro bull mode in 2012.  Bears, you've been warned.


  1. Don't expect to get returns from the QE. Very little of that money was invested to get long term returns. In fact, much of it was spent to hire government employees which will have an inverse effect on positive economic growth.

    Also with all of the QE, that negates any potential third term effect, which is usually rather subtle anyway.

    I agree the market will probably go up long term, but not for the economic reasons mentioned above.

  2. thats a lot of government employees!

  3. Yes it is Franco. Combine that with the amount of money wasted on other government programs and committee's that never actually get something done, and you'd probably puke if you knew the numbers. At a minimum, you would have a better feel for the socialist movement that is being implemented. It is slowly becoming an America that does not support free enterprise.

  4. Yeah, some will go up and some will go down.

  5. socialism has been a part of american culture and government for a long time, since the beginning in some ways. i know its a bad bad word today. but without the ability to socialize risk and loss by using the masses, how could rich people and their companies in the US achieve such remarkable gains? -franco