Put Your Right Foot In
Research for Online Investors

by John Dalt

10/15/09

The market is playing ‘put your right foot in, put your right foot out.’  Where do we go from here?  Investors don’t know whether to buy more or sell into this rally.  When you look at trading channels, it is hard to find stocks that are not at their highs, or close enough that the risk reward is reduced, or non-existent.

The buyers are waiting on confirmation that we have not climbed to the precipice, only to fall off the cliff.  Holders of securities have last October in mind, and don’t want to lose the gains they have.  What about the poor boys that own gold or silver ETFs?  What do you do?  Gains from the last months run up can evaporate in a few days, but you don’t want to miss the next leg up!

These are the dilemmas facing traders today.  Investors, on the other hand have enjoyed the same gains in this recovery, if they never sold.

I will go against the newsletter writers and talking heads on TV, the market is going higher.  I don’t know how much, but buyers are buying on good news and ignoring bad news.  Earnings and forecasts are encouraging.  We will have some bad earnings, but even Winnebago surprised the market today with a smaller loss than expected.  Short term our premium subscribers are watching for 1140 to 1150 on the S&P 500.

Goldman Sachs (GS) reported earnings this morning, beating estimates by 20%, the ‘whisper’ number was even higher.  In classic “buy the rumor, sell the news”, GS sold off.  Out with the earning release is news that GS has set aside $16.7 billion for bonuses in the first nine months of 2009  The Financial Times has the story, “GS set to match record bonus Pool.”  Record bonuses ought to cause new hearings in Washington, oh…the gnashing of teeth.

Today is the last day of ‘tax amnesty’ for U.S. citizens that hid assets overseas.  Taxpayers that thought Swiss banking laws protected them from disclosure of assets held, have been lining up to avoid criminal prosecution.  As C.Ho. said, “America is not as free a place as people assume.”   The Wall Street Journal has the story, “IRS Touts Its Amnesty.”  They report more than 7,500 taxpayers have taken advantage, with accounts ranging from $10,000 to over $100 million.  The penalties are 20% of the highest value since 2003  If they lost money in the last two years…that could get ugly.

News out today that Social Security will not have a Cost of Living Adjustment (COLA) next year.  Oh! Bama wants congress to over-ride the law and pay all recipients a $250 stimulus.  The AARP agrees that ‘something needs to be done.’  ABC has the story, “It’s Official: No Social Security Increase”.

A homemade balloon, shaped like a flying saucer, was set loose by a six-year old boy in Ft. Collins, Colorado today.  He was reported to be onboard.  It made great TV this afternoon, as the balloon rocketed across Colorado.  The winds were carrying it at what appeared to be a fantastic speed.  It finally came down, after coming perilously close to power lines, but no passengers were to be found.

"The world is a dangerous place to live in. Not because of the people who are evil but because of the people who don't do anything about it." —Albert Einstein

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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