Who Knows?

The Shadow knows. Remember him? It seems a shadow has a firm grip on this stock market. Since the terrible break in mid-April we had a rally and then a decline. Trying to choose a suitable stock or mutual fund has been like grasping at shadows.

Two great Wall Street gurus, Elaine Garzarelli who manages multimillions of investors' dollars and George Soros, king of the hedge funds, each have a different take on the future.

Elaine thinks the Dow Jones Industrials will be at 12,000 to 12,500 by the end of the year. Big George says we are in a bear market and must be very careful where to invest money right now. Another pundit I saw on CNBC whose name I can't remember made a very good case for a trading range for the next several months.

Let's examine the psychology of the majority of investors at this moment in time. Almost every one of them has been beaten with a large stick and big paper profits have been taken from their wallets. They haven't really lost anything, but their enthusiasm for putting more money into the market has been greatly diminished. Most of the financial columnists and talking heads are saying this is a time for caution. The old "buy the break" conventional wisdom seems to have disappeared. How is this going to affect the entire market?

It takes more buyers than sellers to put the market up. That takes conviction and enthusiasm, both of which seem to be lacking. Until the little investor gets back his confidence it makes sense that this market has more chance of going sideways than of making any new contract highs.

There is so much bearish sentiment about what Mr. Greenspan is going to say next week that it may turn into a nonevent. In fact because of all this negative sentiment whatever he does may already be factored into the market. Even if it is a sharp interest rate increase the market may throw it off and move up much to everyone's surprise. A negative event followed by a market rise is quite bullish as we saw from the unemployment number on Friday. That 3.9% unemployment number should have made the market go down, but it went the other way. We could be in for a rally this week.

I believe that if a stock or mutual fund is not going up with a strong momentum you should not buy it. Right now almost all mutual funds are going sideways. There is plenty of time to get invested so the best thing to do is wait until a definite upward trend is established and then buy it.

Since none of the great market mavens can agree then who must you rely upon? You know. You must reply upon your own judgment. Not a broker, not a banker, not an economist, not the guy on CNBC. You. Your guess is just as good as anyone else. You.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

1-888-345-7870; [email protected]

In The News:


Precision Money Management

This article describes the model of a natural relationship between... Read More

The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake

If you're a normal human being, your need to feel... Read More

Adding Funds

Someday you may want to retire and continue to live... Read More

Who Knows?

The Shadow knows. Remember him? It seems a shadow has... Read More

Managing Investing and Stock Market Risks

Reduce your investing and stock market risks by:Setting your sights... Read More

Analyzing Growth Stocks: An Important Focus For Any Investor

Analyzing growth stocks is an important focus for any investor.... Read More

Why Buy and Hold?

Since I can remember, and that's a long time ago,... Read More

Hedge Fund Advertising

Have you seen all those big full page ads for... Read More

How Eating Bitumen Made Me a Better Trader

Trading is a fascinating activity.There are so many layers to... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

The 401(K): How The Insider Has Stolen Your Retirement!

Mutual funds were moderately successful in creating a presence in... Read More

Fools Gold

The stock market has been in an up trend for... Read More

The Great Stock Market Secret

When the stock market is going up and all your... Read More

Your Job

There are so many kinds of work that needs to... Read More

Investment Lawyers and Trash Stocks

The trash business in its efforts to cook their books... Read More

Hedge Funds: the Good, the Bad, and the Ugly

Alfred Winslow Jones started hedge funds in 1949. He was... Read More

The Stock Market - Part 1: Believe It Or Not, Its Always Been Your Best Friend And Always Will Be

Regardless of the fact that the world's stock markets have... Read More

The Stock Trading Plan - Why You Must Have One To Trade Successfully

This is the continuing story of our two imaginary traders,... Read More

Investment Attorneys and Garbage Stocks

How is it possible that trash Companies are posting less... Read More

NASDAQ 800?

In November of 2000 when the NASDAQ was trading at... Read More

Selection Vs Direction

As I have said many times before in this column... Read More

Pamplona, the Wild Investment Bulls

You remember (they show it on TV every year) the... Read More

Selling Strategies - Setting a Stop Loss

Sometimes the best way of lowering exposure to risk is... Read More

Hot Stock Trader: How to Pick Momentum Stocks with Ease and Simplicity

Most stock traders know that momentum trading can be a... Read More

Jack and Jill

Jack and Jill went up the hill to fetch a... Read More