Wednesday, April 29, 2009

Why Market in the uptrend for so long time?

For almost 8 weeks, stocks are up up and up, why?

Is it because of the good news, a group of good news? No, there is a lot of bad news, a lot of very bad news. However, even for bad news, wall street tried to find the bright side in the bad news, they don't want the bad news.

Yes, wall street now don't want to pay attention to bad news. Why? The reason is quite complex.
1. US want to save his financial system, this is the foundation of US.
2. To save the banks, they need huge amount of money, 780B Fed money is not enough, they need money from investors
3. Investors won't give their money if the stock maket are horrible low, banks cannot issue more stock successfully if their stock price is very low.
4. So stock must go up up

Now, the question is whether it is up enough now? Since big banks are said to issue more stocks, such as GS, BOA, Citi. I think within two weeks, market will start to drop. Bears, be patient

1 comment:

  1. Swinger is using a different trading system focusing ES futures with a different time frame than what I trade using Pivot Trend System.

    Hope that readers here don't get confused. I appreciate Swinger's inputs.

    ReplyDelete