S&P is trading at critical levels and has shown some support around 880 levels. It is a difficult market but it is also trying to tell us something. The message is: If you need cash for next 1-2 years then don't jump in the market; otherwise it is time to start thinking about putting some cash to work.
We all are so focused on short term trading patterns and media buzz that we are not focusing on the key indicators that market is giving us for a turnaround. Here are few that I am watching closely:
1: Business inventories are falling shapely which means that when the demand improves the manufacturing will improve
2: Financials are bottoming. GS delivered blockbuster results today and I expect MS,JPM, BAC, WFC to follow the leader. The point is worst is behind the Financials and the long term trend looks up
3: Long term bears are turning bulls and that would mean that the money on the sidelines could start to come into the equities. I say S&P at 1000 by Dec 2009.
BUT, all this could fall apart if unemployment continue to rise.
Happy investing :-). Here are my favorate pics: AAPL, MS, BAC, BSX, FCX, MOS, MRVL, EGLE, MGM, ENER, URE, UYM,
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