Saturday, November 6, 2010

The Week Went Perfect

It's really amazing to me how much can totally change in the markets over just a week. All three major indices are set to hit 2-year highs next week. QE2 is locked in at a point very slightly above the lower expectations of $500 billion. Jobs numbers were surprisingly good for the previous month. We have a republican house and democratic senate, and Obama appears to be making a concentrated effort to spark the economy and the markets in particular.

Here are some articles that summarize all this data:
Stocks Finished Week At 2-Year High On QE2 And Jobs
Treasuries Drop, Stocks Fluctuate as Jobs Growth Tops Estimates

And of course the bears want their say too:
Analysis: Fed's QE2 raises alarm of commodity bubble
QE2: $600 Billion Fed Move Targets New Jobs, But Risks Inflation

I am very much bullish on this market, especially after Friday. I felt if the market had gone up big again on Friday, the drop on Monday could have a longer lasting price effect than needed. If the market had gone down and erased some or even all of Thursday's gain, I would be afraid of the negative sentiment it would leave over the weekend. Luckily, in my opinion, the market stayed essentially flat all day. To me this signifies that the market has now moved into a new range.

Of course there will be some profit taking in the next week or two that will pull the markets down from those 2-year highs, but only briefly. I expect the rest of November to be a great buying oppportunity and by the end of the month I expect to be breaking through some of those multi-year highs. In other words, if you wanted a time to get into the market, I think watching for some profit taking in any stocks you are interested in will be the best price opportunity you will get for the next year or two, possibly more.

Something that has me very excited about the future of the economy is Obama's apparent new attitude. Coming out after the elections and saying the things he needed to say was a great sign. Now Obama is touring Asia on what he has said will be a markedly domestic trip, primarily about the US economy. And this announcement today out of India may be some of the biggest news of the week, though we may not see its full impact for a year or more. For those of you in Boeing (BA) or GE, (I own some GE), kudos!! This is nothing but good news for the two companies, though you may not see any immediate effects, the long term impacts could be huge.

I can barely wait for the next few weeks, to establish some more solid positions! Here are my anticipated moves for the week:
Citigroup (C) - $50
Kraft (KFT) - $70
Marathon Oil (MRO) - $50
AT&T (T) - $30

I use Sharebuilder because of my low liquidity and they allow you to purchase fractional shares on a weekly, non-commissioned trade. I don't normally put in this much in one week, but I have to put my money where my mouth is these next two weeks!

*Note that these are all purely opinions of a very amature investor. In no way do I endorse or work for any of the mentioned companies. I do hold positions in GE, C, KFT, and T already and will be establishing a position in MRO this week.

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