Joined Jul 30, 2008
2,107 Blog Posts

When Market Weakens, Knowledge is Power

Today’s end of the day jump was a little deceiving.  Dow closed up a 100 points, but the Nasdaq stayed in the red, showing obvious signs that the market is weak and undecisive.  This was one of those weeks where the market was down enough that we would eventually get a up day.  The warning signs are there, so keep it real.  For example, gold hitting new records is not a sign of optimism (although I do think gold is ridiculously overpriced). 

This was only a breather for the selling, so be careful with buying into this rally and calling it the bottom.  Simply put, we still have a lot more down to go.  On the plus side for the longs, investor sentiment is getting to low levels.  There’s many reasons why, but let’s go ahead and say the pessimism is fed by the stall in the job market recovery.  Of the few people that find jobs, many of them are temporary.  I know a few union workers that have been out of a job for too long, and so they decided to just go and start their own business and undercut everyone else.  Either that, or others in society are looking to advance their education to make a career change or to add an extra level skill so they can be more competitive.  With a weakened economy, knowledge is power.  That means knowing what’s wrong with the market, and knowing what steps to take to survive it.  That applies to the stock market as well.

Education Stocks Showing Relative Strength:

STRA … volume is up.

EDU  … attempting to form a base at 88-90.

High risk/ High return education stocks:  [[DL]] , [[REVU]]   … look to get long if EDU can extend rally.

Other plays:

Foreign solar stocks are worth shorting on supply problems:  SPWRA (heading to single digits), STP, YGE

PEET – nice short play for conservative players.  Easy stop loss set to 40.

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  1. Spyder_Crusher

    good post Gio

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  2. The Zombie

    Agreed. Excellent work, Gio.

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  3. Gio

    Thanx. Great game in Boston. Played at my club tonight, man I couldn’t make a layup, but I crashed the boards and got the W. Felt like Lakers tonight.

    Go Fisher!

    Hey Zombie, do you battle with plants?

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