Weekend Investment Reading – Trading Range

by Investing School on May 29, 2009

As a trader, the market action these days are amazingly good. Buy when it goes down, sell when it goes high. Rinse and repeat. As an investor though, the moves must be driving you nuts. The Dow has been stuck in this range for about a month now, and it’s hard to say whether the bulls or the bears will win this tug of war.

On the bull’s side, it’s still the same arguments that recovery is well under way. That it’s never as bad as everyone thought it will be and there are tremendous amounts of cash on the sidelines waiting to be invested.

The bears argue that while the downturn is slowing its pace and shows signs of stabilizing, we are far from a recovery that the rally suggests. They believe that the foreclosure wave is still yet to come and when the fed runs out of gas with all the stimulus, the economy, and thus the stock market, will tumble.

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{ 2 comments… read them below or add one }

MoneyEnergy May 31, 2009 at 11:18 pm

Thanks for submitting to the carnival! I agree the markets are doing unusually well given all the fundamentals. I do think it’s largely consumer-confidence driven, and maybe some inflation already factored in there. I’m not a long-term bear, but I do think this is still a bear market rally. Will be interesting to see the ramifications of GM’s bankruptcy filing tomorrow.


Manshu June 1, 2009 at 4:34 pm

Thanks for linking back to the carnival!


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