Two Ways: Will Stock Market Double-Dip?
Strengthen your portfolio in good times and bad.
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!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter