| Look Back to Get Ahead — Stock Advice for the Upcoming Year |
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| December 18, 2007 |
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I know I’m not the first person to say this but I’m going to say it anyways—so here goes. If you want to know what will happen in the future, you need to be aware of the past. Well not just aware, but rather you should have a thorough understanding of it.
So no matter what “they” say about an impending downturn in the market in the upcoming months, I beg to differ. I have mentioned several things throughout the past few weeks and months that contradict the stock market news headlines that are currently making the rounds—and of course, stirring up concern and confusion.
But I’m in the business of giving good online stock trading advice — so listen up. The real story is that we are on track to experience a stealth rally and tack on at least 500 NASDAQ points from current levels.
How could I possibly be so bold as to predict such a thing? Like I said, look back…
- The third quarter was the eighth in a row of more than $100 billion in stock buyback spending.
- Companies announced more than $33 billion in new share buybacks two weeks ago.
- We have the highest short interest EVER in the history of short interest going on in the S&P 500 right now due to all the share buy backs. Think of it as a supply/demand issue: when stocks are hot, there is much less supply to buy—it works in reverse when stocks aren’t because fewer and fewer shares are on the exchanges. Hence the reason ETFs can move entire sectors (even though I believe the S&P 500 ETF (SPY) makes up only about 6% of the actual index.) Obviously, momentum is still there.
- The YEN carry trade appears to have finally run its course and is likely to resume its downtrend. (Meaning Japan has warned speculators causing the run-up in the value of the YEN to watch out — it wasn’t a hint; it was a flat-out blatant statement).
- Similar to what happened in 1998, the Fed has now cut federal interest rates 3 times—and might continue—just like Greenspan. Back then it may have been about the Asian currency crisis but the chart patterns within the DOW, S&P 500 and NASDAQ were the same. (I pointed this out in February, March, April, May, July and August of this year several times to my Trending123 subscribers.)
- The $UTIL will lead the way as I have stated many times before. When it topped in May we knew rocky times were ahead, well guess what? As expected in December of 2007 it broke out to NEW all time highs. A great example, once again, of how history repeats the past — what happened before will happen again. The Utility index is the most interest rate sensitive index we have. They carry the MOST debt on their balance sheets so when they rise to new highs we can safely assume that rates are NOT headed higher.
- The rally in China will continue through the first half of 2008 and is not in a bear market no matter what some newsletter writers whose names I won’t mention might have you believe. I have provided my Trending123 subscribers with several charts and updates about this because it is quite clear that the highs have yet to be reached.
Now, I’m sorry, but you would have to be some sort of Market Grinch to thumb your nose at all of this and tell me you STILL think we are on a path to market destruction.
Still unconvinced? Let me make it my mission then to convince you otherwise — find out about my special low introductory price on a Trending123 subscription.
Sincerely,
John Lansing
Trending123
P.S. What has Trending123 been up to this year? Thus far we have closed 113 trades — winning 85 and losing 28, for an astounding winning percentage of 75.3%. Better yet, we’ve averaged an 85.09% annualized gain on each trade (winners and losers included)!
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