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Two Ways: Will Stock Market Double-Dip?


Strengthen your portfolio in good times and bad.

Dow 9000!

The Dow Jones Industrial Average closed above 9000 for the first time since January. It marks a rally of over 2,500 points, or almost 39%, in a span of a little more than 4 months, according to the New York Times.

The underlying belief behind yesterday's nearly 200-point performance is that companies are reporting better-than-expected profits with companies like Intel (INTC), 3M (MMM), and even Ford (F) beating expectations.

But just as the Dow reached that psychological level, earnings results from Microsoft (MSFT) and American Express (AXP) disappointed investors. Strategists are calling for a correction in the markets, with some economists warning that a failed economic recovery could even lead to a double-dip recession wiping out stock market gains.

From the Bull Pen: The prevailing sentiment is that the market is getting a little ahead of itself and "should" have a meaningful pullback. This makes the contrarian believe that if stocks are on the path of maximum frustration, then they are headed higher. Bulls can look to the retail ETF (RTH). Consider an entry near $80-79 with a sell stop 2% below.

From the Bear Cave: If you do believe stocks will correct, consider playing the downside in the Ultra Dow ETF (DDM). Limit your risk using buy stops near $33-34 or using put options where the risk is limited to the premium.

Quick Check Around the World

Asian trading closed with the Hang Seng 0.83%, India 0.97%, Shanghai 1.33%, Nikkei 1.55%, and Taiwan -0.11%.

Glancing towards Europe, we see the FTSE 0.51%, CAC 0.44%, DAX 0.38%,

As of 8:05 AM EST, S&P Futures are trading +2.00 to 970.75 and Nasdaq futures are -1.00 to 1583.25.

A Look at Commodities

Over in commodities, crude oil is trading -0.16 to 67.00 while gold is -1.900 at 952.90 this morning. Silver is -0.500 to 13.77 and copper +1.05 to 253.05.

The dollar index is -0.1800 to 78.7900.

On the Radar


09:55 Michigan Sentiment Revised 64.6 cons.

Happy Friday! Good luck today!
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No positions in stocks mentioned.

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