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I expect the recent volatility is on readers’ minds, so let’s get right to TradeMaster‘s Jason Cimpl and his outlook:
The bulls did not capitalize on Friday’s bullish close yesterday. Stocks were up strongly in the morning with most indices up more than half a percent. Those gains held into the afternoon and it seemed as though we were going to see a nice pop into the close. Then around three, the market started to turn red and indices sold off hard in the last hour of the day. But it is not over for the bulls.
Despite the weak afternoon, the SPX managed to close above 1065 support. Resistance was formidable at 1071, which is the price we will be watching for a break out today in a short squeeze.
Short interest picked up substantially. We closed down most of our shorts already (including one with a sweet 15% profit . Basically, the market is oversold and any pop up will be fast. We held onto most of our longs anticipating a move higher, possibly back up to 1120, but we will be selling into any rally.
It’s important to remember that the vast majority of stock trading volume comes from institutional investors like mutual funds, hedge funds, and even sovereign investment funds.
As Jason notes, stocks rolled over yesterday afternoon. That’s consistent with institutional trading, which tends to take place during the first and last hour of the trading day.
It’s also important to remember that institutional selling isn’t necessarily an indication of economic or earnings data. Part of the reason stock prices hit such lows last March was that banks and other investors had to raise cash at all costs. And that can mean selling assets, regardless of one’s outlook.
A similar situation may be happening right now. Greece (especially) and other European countries have debt problems. No doubt some of the selling activity we’ve seen lately is related to this. Investors are hopeful that a solution for Greece’s debt problems is on the horizon. That’s helping today’s upside bias. That hope is also boosting the euro against the U.S. dollar which is good for stocks and commodities.
Also, don’t dismiss the government’s new-found focus on employment. We’ve already started to see what may be a trend change for employment. Jobs are the missing link to the economic recovery. Good news on this front will certainly help stocks move higher.
My staff and I have been hard at work building a central location for all of my investment advisory services and e-letters. And so today, I’d like to announce a name-change for my company and a new website. We are now Wyatt Investment Research, and I encourage you to check out our new website, www.wyattresearch.com.
I’d like to send a special thank you to my programmer, Dan Mills. He’s worked tirelessly building the new Wyatt Investment Research site. And not only does it look great, it’s also functional for subscribers to my premium services. The logos on the left take you right to the service you’ve joined.
Have a look and tell me what you think. My address is: [email protected].
I have another announcement. To kick off the new website, the Wyatt Investment Research 2010 Economic Predictions and Investment Outlook Special Report has been released. This is my blueprint for profits in 2010, and you won’t want to miss it.
Last year’s Predictions report was a great success. I led readers to the top performing sectors like oil and natural gas, China, select technology, and gold and other commodities. We also correctly anticipated the recovery rally, the fact that unemployment would hit double-digits and stay there, and that weakness in the housing market would continue.
2009 was a great year for my investment strategies. And now, I’m attacking 2010 with the same profitable insights. In Predictions 2010, you’ll get my outlook on emerging markets like China and Brazil. You’ll learn what to expect from Europe (Hint: it’s not good!), where gold and oil prices are headed, and when interest rates will rise.
Not only that, I also cover what I expect will be the top-performing sectors for profitable investments. And I share many of my top investment recommendations.
There’s just one catch – the 2010 Economic Predictions and Investment Outlook Special Report is free to my subscribers. It’s one of the many benefits of membership to one of Wyatt Investment Research’s premium investment advisory services. So while your checking out the new website, sign up for one of my top-performing advisory services and get the Predictions 2010 Special Report. All of my premium services have 30-day money-back guarantees if you’re not satisfied.
In 2009 Small Cap Investor PRO was the best performing service. But I’m also particularly excited about the recent launch of Energy World Profits with renowned energy economist Gregor Macdonald. His research is phenomenal, and some of his conclusions will surprise you. His insights have already led us to 31%, 24%, 18% and 15% gains since the service launched in October.
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I hope you’ll check out the new website. And if you’re interested in checking out one of my advisory services, remember, they all have 30-day money back guarantees. And with a 20% discount today only, it’s a great time to add these services to your investment research arsenal.