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Two Ways To Play: Economic Stimulus 2.0


Strengthen your portfolio in good times and bad.


Second Stimulus Act?

The top story on Bloomberg this morning: Lawmakers are planning a second fiscal stimulus package. Federal Reserve Chairman Ben Bernanke endorsed the idea, and so far there's little opposition from the White House.

Bernanke warned yesterday that the credit crisis is starting to "hit home," as Americans are unable to get loans and companies are being denied funding. It was this weak outlook -- and danger of a protracted slowdown -- that convinced the chairman to support talks of a stimulus plan. Last winter, his endorsement cleared the way for a $168 billion tax refund. See one of Professor Fil Zucchi's strategies for trudging through the mess in Gold Caught In Inflation Tug-o-War.

From the Bull Pen: Bulls can consider gold for a longer-term play. Professor Zucchi acknowledged the frustrations, describing yellow metal as being in a "tug-of-war." Nonetheless, one can consider the SPDR Gold Shares ETF (GLD) with near-term sell stops around $76-$75.

From the Bear Cave: Bears know that any lift from the stimulus plan would simply be temporary. One can consider a downside play in GameStop (GME); buy stops can be set above $35.

Quick Check Around the World

Asian trading closed with the Hang Seng -1.84%, Nikkei 3.34%, Sensex 4.50%, Taiwan 0.22% and Shanghai -0.79%.

Glancing towards Europe, we see the CAC 1.10%, DAX -1.04%, FTSE -0.30%

As of 8:25 a.m. EST, S&P Futures are trading -15 to 974, and Nasdaq futures are -25 to 1335.

A Look At Commodities

Crude oil is trading -1.60 to 72.65. Gold is -11 to 778. Silver is +0.050 to 9.745 and copper is -6.20 to 211.90.

The dollar index is +0.650 to 83.745.

No economic events on the radar. Good luck today!

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No positions in stocks mentioned.

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