Finally Fear - When Will The Sale Start - Thursday Maybe?

Wednesday probably some more down more.   I things stabilize expect thursday or friday to be an up day.  

The Bears Team:

1. Libya will raise oil prices on fear alone.    The larger issue is what next.    Then Bahrain will  and Bahrain
2. WIKILEAKS and Internet mischief with Mastercard
3. Market is high and there is a long way down in investors minds.
4. IRELAND!   GREECE!   What about Portugal, Spain, and Italy?   What about a recurance of Greece unresolved issues?   
5. European pop-up issues from the banking, lending, or housing issues from the little or big PIIGS.    Moody's or S&P downgrades possible.
6. Future Headlines? - "EU Division Eminent On Spain (or Italy) Moody's Bond Rating Downgrade!"   
7. China, Australia continue raising interest rates.   Not really sure this is bad for US when you look out months
8. Israel and Iran are unusually quite.   When will hatreds in the Middle East ignite again.
9. How much BS can South Korea tolerate from North Korea.   North Korea massing special ops troops on the border.    Will posturing ever be misinterpreted into WAR?
10. CALIFORNIA STATE DECLARES BANKRUPSY!    just kidding!  But someone is going to post something like this and the market will react.   California, New Jersey, Ohio and populous "Blue" states still are running unsustainable deficits.   There is a lot of downside to a credit downgrade of a state and a lot of potential what next questions.     What will be the market ripples on a large state downgrade?
11. Currency Wars to deflate currencies.   How will China, Brazil, and Japan continue to lower the Dollar?
12. Market is at a 12 month high.   Risk of a correction is real from a technical standpoint.    There is a long way down especially in peoples minds.
13. Companies are running out of ways to cut costs.   Given they are not growing what will propel valuations higher. 
14. Investors remain skittish about past Dot Bomb and Financial Busts.   Major downturns have not had enough time to be solidly in the past.   Market memory is still very negative so greed is not likely to take hold for quite a while.

The Bull Team:

1. Money flows are moving out of bonds and into stocks again.  What possible upside is left in the bond market?    QEII will continue to drive people out of bonds.    Individual investors will start to move.   The question is when and how fast?
2. Need more detail of how much though.
3. QEII - Stimulative Spending II is a go.   The economy seems to be moving and this bill will likely put us over on stimulus.
4. Earnings are getting better
5. Unemployment is starting to firm.
6. EU will just spend its way out of Banking issues.
7. Bernanke will spend his way out of the Recession.    He has great wisdom about depressions.
8. More elected republicans make DC more business friendly (less effective politicians)
9. Government gridlock is likely to limit spending programs?    We will see.  
10. Earnings are likely to push further higher on continued cutting and trimming of budgets
11. Europe risk has calmed down and become background noise after Irelands latest downgrade.   

Sold 100 Shares WM and Bought GLD 110917 C130 Call Options

Waste Management is still a likeable stock but might have a short term trend downwards so lets see.    I decided to buy more upside on the gold market given the Indian Wedding Season, Government Purchase, and Inflation for the next 6 months all seem positive.    However, I believe gold is a trade this year an not a long term trade.  

Let me know your thoughts.

Buy What Now - EEM, AA, ABT, NUE or ???

Larger Market is not frothy and high, but earnings are keeping up with the DOW advance.   In this type of a market buying calls still make sense.    Profit from upside and minimal downside of insurance fees.   

When Will There Be A Correction

Egypt was just a pause.    What great bear cause will create a correction in this market?    Things just seem like they have been too good for too long.    Valuations are not that rich however.   

What Looks Cheap: AXP, EEM, ABT

ABT seems to be a great stock in a bad neighborhood.    Pharmaceuticals are plaqued by a lower budget future for developed nations which is their majority market.    I am not going to buy for a while

EEM - Egypt and Geopoliticals seem to have a ripple effect on the uncertainty for foreign markets or emerging markets especially.    The middle east in general is potentially in for a lot of political surprises in Syria, Jordan, Tunisia, Lybia, and the like.     Additionally, the creation of south Sudan will continue to create some future doubt.    So the doubt and therefore riskmeter is rising.   

AXP - American express is a great company and leader of its industry.    I is down a bit lately, but is poised to do better in the future.   Problems for AXP in the long term would seem to come from AAPL or Nokia or a cell phone supplier that is providing a cellphone that can substitute in place of a card.     This could take share as consumers will continue to move towards the most simple solutions available.  


Out of these three potential buys I am not going to pick any of them to buy right now.   But, I like EEM and AXP on another strange down day. 

Any others that are of consideration.?

Sold 100 Shares of HD on Raw Cost / Margin Worries

See below blog....

HD - Will Home Depot Succumb to the Same Raw Cost Problems as PG

I think there will be some short term cost absorbsion by Home Depot for inflation driven raw costs.   However, given the few competitors in the home supply market, I would think their exposure and transfer of cost would be quicker than PG.    So, I would expect some contraction in margins starting in quarter 1 of 2011.    Let me know your thoughts or ideas about HDs stock price impact originating from raw cost increases.?