Wow! What an impressive rally today. I still do not know what stocks really took us higher.
Bernanke’s testimony told us last week that “dollar intervention should be done rarely” but that it “may be justified in disorderly times.”
Despite, major earnings pressure and bad guidance the bulls have turned in a win today. With Wachovia’s horrible q and the American Express guidance, it is clear that the financials have poor prospects for earnings growth.
These two companies sent the dollar reeling this morning with fears of another meltdown. By early morning trade for no reason the dollar reversed course and oil and gold went down south.
I’m not calling a bottom with the myriad of problems abound, but today’s action does suggest either more strength in the markets than investors anticipate or that The PPT has serious power. I would like to believe the former rather than the latter.
Everything aside arguments can be made for value or destruction. I would rather look towards value and protect against destruction. This means forget about the financials until you have seen a death warmed over flat line in the charts.
Buy value plays over time and hedge your bets with shorts when you feel the market tops out. Today I refrained from GLD and SRS as hedges and so far so good. For me the top is 1280 S&P…If we manage to get above this then 1300-1325 would be tops and I will definitely take on massive shorts.
http://www.marketoracle.co.uk/Article5500.html
by GW
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