Another big push pre-markets attempting to engineer a new high. As with most up days, yesterday's low-volume fiasco had us punching 2,120 at the open, followed by a whole day of institutions selling to all the people Cramer and Co. could manage to chase into the market, following their promise of pots of gold at the end of the rainbow.
Cramer looks a bit like a Leprechaun, who are famous for tricking people with false promises of easy money as well. We don't promise easy money here at Phistockworld, we teach people "How to Get Rich Slowly," using sound investment strategies and we DISCOURAGE the kind of hot money chasing that is the hallmark of CNBC and the rest of the MSM's advice. We are currently VERY CONCERNED with the level of froth we're seeing in the markets and we've moved our Member Portfolios mainly to CASH!!! for the duration of earnings season (the rest of May).
As you can see from the chart on the right, lumber has gotten 22% cheaper this quarter but Lumber Liquidators, who buy lots of lumber, has gone down 60% since February. Sure, they have a scandal and all that but still – don't you think getting lumber for 22% less this Q might be a long-term benefit to them? We already have a position on LL in our Long-Term Portfolio and it's about flat so far and still a good entry as a new trade. We'll go over it today in our FREE Live Trading Webinar at 1pm, EST.
China’s stocks fell this morning amid concerns that recent gains were excessive relative to the outlook for economic growth (duh!). Phone companies, the best performers over the past month, led the declines and the index finished at the day's low – a strong indication that the selling isn't done, they simply ran out of time…
With oil (and gasoline) up 30% in less than 60 days, it's no wonder that the Economic Confidence Index is falling off a cliff, dropping from -3 to -9 in the largest drop since oil peaked out over $100 last July. $60 oil feels like $100 oil after you've briefly enjoyed $45 oil and gas back around $1.50.
According to Gallup, Americans' confidence in the economy does appear responsive to the latest reports on U.S. economic activity, and this Friday's report on job creation and unemployment could help determine where confidence heads in the coming weeks. Unless the economic news continues to be bad, Americans may soon forget about the weak first quarter GDP and rising gas prices, which, the EIA projects, will stabilize during the summer.
As we know, in the markets, bad news has been good news as it tends to bring the Fed back to the table but that Infinite Free Money fantasy may one day come to an end and God help the bulls when it does!
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