Home on the Range

Over the last few months, the stock market has traded in a range that has confounded both bulls and bears alike. Now, we are fast approaching the top of the range once again. Will the averages disappoint once again or are we on the verge of a break out?

Do we go higher or lower?

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Deja Vu

“U.S. stocks opened higher Thursday as the Federal Reserve and four of the world’s other major central banks agreed to make U.S. dollars more readily available in Europe’s struggling financial system.”

“… Early Thursday, investors welcomed the news that the Fed — along with the central banks of England, Switzerland, Japan and the euro zone — is coordinating a program to boost dollar liquidity in the region.”

                                                                           CNNMONEY, September 15, 2011, 9:47 A.M.

            The markets are climbing in celebration that the central banks of the world are combining and coordinating their immense financial power to bolster Europe’s struggling banks. The message the ECB is trying to telegraph to investors is that Europe is not going to allow a Lehman Brothers-type disaster occur within their community. Why then am I so worried?

Keep your eyes on Europe

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Trading in the stock market right now is akin to having your pocket picked by a blind man whose pocket you just picked a moment ago. In other words, get to the sidelines if you aren’t already there.

Get off this roller coaster. It's going the wrong way.

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Picture an entire fleet of brand new Nimitz-class aircraft carriers, chock full of the latest stealth aircraft that money can buy, then double it. That’s about the size of the dollar and cents differences one finds in trying to estimate the costs of 9/11. Just how large is the range? (more…)

By now everyone knows the outcome of Ben Bernanke’s speech at Jackson Hole on Friday. For those looking for a cure-all from the chairman of the Federal Reserve, his speech was a disappointment.

Bernanke tosses the ball

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            The safe bet would be to write about something else because by the time you read this Federal Reserve Bank Chairman Ben Bernanke will have already given his speech in Jackson Hole, Wyoming scheduled for Friday morning. I’m betting that whatever he says won’t be enough to save the stock market from further decline.

All eyes on the Fed

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            Everyone seems to be looking for the same thing, an end to the pain, an end to the stress, a place where the selling stops. It’s called a bottom and it appears to me that we haven’t found one yet. (more…)

Investors are selling first and waiting for the facts later. Few can blame them given their experience in 2008-2009. Investors in the stock market sustained huge losses by naively believing that the financial sector and the government were in control of that crisis. This time around, no one believes anything they say.

Germany's engine is running out of steam

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Last week, I advised investors to “wait for the bounce” before getting more defensive. We’ve had three bounces this week, so by now you are either out of your most aggressive investments or nearly so. Stay defensive. (more…)

  It’s been one heck of a two weeks. One would think the world was coming to an end, given the way global markets have behaved. You may not be able to make much sense of why markets sold off so quickly, but out of the carnage we may be able to predict what comes next. Here’s why. (more…)