Everyone is so hoping that the market is bottoming because they all want to recoup their losses from last year, especially us 401k holders. For some strange reason, corporate profits appear to be beating expectations and everyone is hoping (wishing) that the market has bottomed and turned the corner.
“Corporate profits are beating expectations by their widest margins in a year, pushing most equity markets within a whisker of new year-to-date highs and the dollar toward its 2009 lows,” John Normand, head of global currency strategy at JPMorgan Chase & Co. in London, wrote in a research note. [via Bloomberg]
What everyone forgets is that these corporate earnings, especially if you are a bank, are based on the backs of the American taxpayer and bailouts. Sure some corporate earnings are legitimate but most of these earnings defy common sense and logic. That's why the US Dollar is heading lower, we're going to destroy our greenback at the expense of trying to stabilize the markets with phony earnings.
Call me an old cranky fart but we'll be in for one more decent run in the S&P500 before it takes another big dump. Things are lining up for a classic short squeeze where we'll see the S&P500 run up between the 1131 and 1210 levels. This time I'll be dumping before that and rotating some of my recent 401k profits into cash, waiting for the capitulation in the markets (which hasn't happened BTW) to go on a buying spree.
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