Stocks Show True Colors
March 2, 2008
12:10pm EST Heavy Institutional selling floods Wall Street all but killing the most recent rally attempt.
Friday Wall Street witnessed real institutional selling as fears about the economy continue to weigh on the minds of investors. The action on Friday came no surprise to me as we have had very suspect leadership. Prior leaders like MSFT, AAPL, INTC, and GOOG had been leading this most recent rally attempt. Taking a look at these stocks there is no question this rally was shaky at best. As I wrote in this post to beware of Bear Market rallies as they tend to suck in the “bottom fisher’s.” This market has a long term downtrend, beware of fighting against such a strong trend.
The best position right now is to be in cash and not to be the one calling the bottom in AAPL or GOOG. The uphill climb these two have to make you are better off running to the slots and plunking your cash down there. It is really tempting to be the “one” to pick bottoms but it proves far too difficult for 99% of traders who try.
Where is the bull market? Its not hard to guess where that is if you haven’t been stuck under a rock. Commodities continue to see unprecedented growth due to many factors including: excess liquidity, ethanol production, and speculation. I do not see any of these factors not continuing in the near future. The FOMC will again cut rates in March, ethanol production will continue, and speculation will only grow as the first two factors continue.
Be cash cash heavy!
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Reuters Business- Alcoa to slash jobs and sell 4 unitsNEW YORK (Reuters) - Alcoa Inc said on Tuesday it would slash more than 15,000 jobs, halve capital spending and sell four businesses as it reduces aluminum production in the face of the global economic downturn.
- Bank of America sells $2.8 billion China bank stakeHONG KONG (Reuters) - Top U.S. lender Bank of America , raising cash to weather a dismal market at home, sold a $2.83 billion chunk of its holding in China Construction Bank on Wednesday, dragging the Chinese bank's stock 6 percent lower.
- Asia stocks at 2-month highHONG KONG (Reuters) - Asian stocks rose on Wednesday, extending their recent rally into an eighth straight day, inspired by hopes massive U.S. government spending and tax cuts will continue to support the dollar and stimulate demand for exports.
- Alcoa to slash jobs and sell 4 units
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