Nine Winning Trades For 2009
Houghton and Atkeson, March 22, 2009
Free Trading Guides
-
Trade #8: Mid-Year Inflection Point
There is a strong possibility that in the middle of 2009, the equity market may begin to anticipate a better 2010 and start to run. If this is the case, we may want to switch from defense to offense and get long the more levered companies. During the first half of 2009, expect to see many false starts where investors anticipate the turn too early and suffer losses as a result. We saw this to some extent in 2008 with the Russell 2000 Index ETF (IWM) outperforming the broader market by as much as 10 percentage points up through September. Since September, it has pulled much closer to in-line with the rest of the market.
More By This Expert
Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
MOST POPULAR
- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
Options Broker Center
