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Old 08-11-2011, 09:42 PM   Nav to Top  #1
Vinnystocktips
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Lightbulb Record Breaking Day in Markets, Fundamentals & Technicals Fight

"Between August 3rd and August 11th we have seen the most insider buying since March of 2009, and we all know what happened then.", Melissa Lee said today on CNBC.

"Rarely do I invest in stocks. I prefer real estate normally. Banks are not paying me anything to keep my money in C.D.'s so I put some money to work into stocks recently. I bought Bank of America, Citigroup, Caterpillar, Intel, and P&G, stocks just seem real cheap here, I will tell you in 6 months if it was a good idea or not.", this was said this morning on Squak Box on CNBC by Donald Trump.

These are two very resonating quotes that I heard today. On top of that the jobless claims number decreased and earnings have been solid in recent days led by Cisco last night which advanced 16% today. This led to the market advancing over 423 points on the DOW and over 4% on the other averages. This was a record setting 4th trading day moving over 500 points in a session. Unreal! It is exhilarating that is for sure, even though it most likely also has taken a couple months off my life expectancy! Retail had really solid earnings recently from Macy's, Nordstrom's, and Kohl's today.

Even with all this positive news, the market did not end at its highs, losing 120 points in the last 15 minutes of trading. That did not bode well for the technicals. Today's close, even though up huge, it was lower than Tuesday's high. This means we are sloping down making lower highs and lower lows for a couple weeks now. Longer term, we have a downward slanting double top from the 2007 high and the 2011 high. Will tomorrow continue this pattern?

Now this is a very compelling argument for both bulls and bears. Personally, I am a fundamental trader, and in my opinion, the fundamentals of the US market is much better than this doomsday scenario that some people are talking about. Bank stress levels are so far from the levels they were at in 2008 that I doubt they are going to have liquidity issues in the US. European banks are a different story since they hold so much sovereign debt of the PIIGS is compounded by safe haven European countries risking ratings downgrades. How many times have you heard about a US default since the debt ceiling vote in Congress? Not very many if at all, everything is about default in Europe.

I am in the camp that there are many companies on sale in this panic trading. I talked about Nvidia being oversold to the downside and after their beat on estimates and they shot up 20% today. This backs solid tech earnings from Google, LinkedIn, Cisco, Cree, and others. There will be a new IPhone and Ipad release by Apple before the end of the year which will make tons of money for many different companies in the upcoming quarters. I have heard so many ridiculous numbers for bottoms of this sell-off well under 10k on the DOW. I just cannot see it happening given the earnings of the S&P 500. The only possible scenario where I feel the downside is much further is if credit freezes up on US soil. If that doesn't happen I think the global economy will still grow.

We might not be at the bottom as there are still some uncertainty about Europe and no one likes uncertainty. However, I am very confident we will be higher than we are today in 6 weeks.

http://www.vinnystocktips.com/2011/0...hnicals-fight/


Good Luck and Happy Trading!

Cheers,

Vinny
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Old 08-16-2011, 03:45 AM   Nav to Top  #2
StCrispin
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Bank stress levels may not be as high as they were, but that didnt stop one here in Greater Kansas City area from going belly up last week. I think 13 branches, or maybe it was 17, were closed down.

Myself, i always say never let a good crisis go to waste. When others panic, i "vulch" what they drop. yum yum! sometimes it proves to be a tastey profit, but it always proves to be of benefit in some small degree. Power to the Donald. any man who can lose his fortune twice and get back on the train as he has, has my respect.
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Old 08-16-2011, 04:08 PM   Nav to Top  #3
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Even though everything is dropping, perfect time to buy. yahoo was a great buy at 11.22 last week.
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Old 08-16-2011, 04:09 PM   Nav to Top  #4
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yahoo hit its all time low in 2 years.
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Old 08-16-2011, 06:38 PM   Nav to Top  #5
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You will have to wait for Jacksons Hole Wyoming end of August to hear what Bernake is going to do to keep rates low for two years. It sounds like hes going to use another round of QE3.
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Old 08-23-2011, 08:19 AM   Nav to Top  #6
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I personally hope we do not get QE3 announcements. I think longer term it will cause more harm than good.
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