Thursday, November 27, 2008

Barack Obama pledged "Help is on the way,"

Our technical indicators show the best buying opportunity started at the end of October and should continue into next week.

A set of economic reports out Wednesday were predictably gloomy for the pessimistic media, but the stock market continued its winning streak. The Dow Jones industrials rose and for the first time since April 15-18 there were four straight days of gains. It was S&P's steepest climb since 1933, as a rally in oil prices lifted energy shares and investors speculated President-elect Barack Obama’s economic team will bolster growth.

The market reversed losses from early in the day after President-elect Barack Obama pledged to have a plan to deal with the nation's economic crisis on his first day in office. "Help is on the way," he said.

It affected investors who are gaining confidence that the nation's financial system will not go on the slippery slope of socialism with already 40% of Americans not paying income taxes. When the majority pays not taxes and elects their president America will go down the tubes the way auto unions destroyed the industry productivity by taking salaries for doing nothing. The stock market bolted higher Wednesday, propelling the Dow Jones industrials and Standard & Poor's 500 index and confirming the current relative market bottom.

Asian technology stocks gained last night and Europe is off to a good start today while American markets are closed for Thanksgiving.

Warren Buffett has been buying since the beginning of October. Jim Rogers covered most of his shorts and went long in Chinese equities, commodities and agriculture starting at the end of October. We too prefer Asia markets and emerging markets and high dividend commodity related equties at this time.

We predict the immediate buying opportunity will be over in about 5 business days, and the market will then begin to rise more rapidly to the 200 day moving average by March 2009. We cannot estimate yet if this is the bear market bottom or if the bear will test this area again sometime next year. Even systemic sector related uncertainty is as unpredictable now as random events.

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