Saturday, November 29, 2008
Did You Miss the Window?
There was a great window of opportunity to buy stocks the past three weeks. It was time to buy. Over the past week the market posted its biggest one week increase in 30 years.
the S&P 500 gained over 12%. The Dow Jones rose over 1000 points. General Motors gained 74% and Ford Motor gained 88%. These are really good numbers. And City group continued it's gains doubling in value. The last three weeks have been the best buying opportunity in years.
But, there will be another opportunity this week. A big buying binge leads to stocks being over bought. This will lead to profit taking and stocks will go down significantly. This will be the second best buying window because after profit taking, the stocks will move upward again. Energy stocks began the sell-off on Friday, so they should be the first to rise. Citigroup, Ford, and GM, are stocks to watch. Conoco Phillips is at a bargain price now. So is Gerdau American Steel (GNA). AK Steel dropped 10% on Friday so should be at a bargain this coming week. If the auto companies do, indeed, get their bail out, their stocks will go up, but so will the steel stocks.
The market will not challenge new lows, even if we officially go into a recession, because the lows have already been tested, and government bail outs have remedied several problems.