|August 25, 2009|
"Is this for free?"
I looked up from my laptop. A dreary looking blonde in a chintzy dress -- not the kind of lady that typically graces Joe's Cigar Bar – was taking a handful of match boxes from a bowl on the counter.
Is it Time to "Get even and get out?"
After the big move off the bottom in March, many investors are considering wading back in to the water. Some believe the stage has been set for a new bull market. I don't buy it. Take a look at the chart below, particularly, the volume.
As you can see, despite the surge in the markets, trading volume is low and has been declining. Low volume suggests there are simply not a lot of buyers.
The foundation of a new bull market is not built on low volume. The key to this rally has been the tapering off of aggressive selling. Why? Investors are waiting for higher prices.
Taking a loss is difficult for most investors. Investors typically bring a "get even and get out" attitude to their portfolios after they've suffered big losses. Look for these buyers to start selling again, the closer they get to "even". On the other hand should this rally falter look for these "even and outers" to lose hope and resume selling. Either way, we will see more selling than buying down the road. Not exactly a prescription for a rising market.
"I'll gladly pay you Tuesday for a hamburger today."
The current headlines are soothing. Ben Bernanke says prospects for near-term growth appear good. Existing home sales rise a surprising 7.2%. GM is rehiring workers and even paying overtime to meet new demand.
On Friday, we asked for your thoughts on Bernanke's re-appointment campaign and you didn't disappoint…
Around here, we don't think too much of the guy… and even less of the usurping organization he represents. But our own Christian Hill thinks Bernanke should get another appointment. "He got us into this mess. Let him get us out of it."
According to SB, the entire issue of Bernanke's re-appointment is a diversion.
"European central bankers have been on course for global dominion through debt for over a quarter of a millennium. What possible difference could it make who they decide to place in the driver's seat at the Fed? The Fed chairman is a hired bus driver. He no more chooses the route than do "world leaders."
On that note, we'll leave you with some advice…
The U.S. dollar has lost more than 90% of its value since 1913, when the Federal Reserve Bank was created. It has lost more than 50% of its value since 1987, when "Easy Money Al" Greenspan began his tenure at the bank.
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