Stock Preacher

Healthcare was a winning sector last week, up about 2.2%. That’s not a huge victory, but it beats the overall market’s 3.5% loss for the week. Savvy market observers have ID’s this as a sector trend that will continue grow in importance. And they note that healthcare stocks have lagged since the March 9, 2009 bottom, and that that is the point of a sector rotation strategy to find tomorrow’s leaders, which are frequency yesterday’s losers/laggards. In the past week healthcare stocks have picked up their pace, which may augur the beginning of the next major rotation in US stocks. The bullish bias for healthcare equipment, technology, and suppliers is in place now and it is also worth nothing there really haven’t been any bad healthcare industries to be since early June.

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The S&P 500, since sinking to a 12- year low of 676.53 on March 9 surged 25% as banks from Citigroup Inc. to JP Morgan Chase said they made money in the first two months of 2009 and Treasury Secretary Timothy Geithner announced plans to finance as much as US$1T in purchases of distressed assets from financial firms.

“No matter how you feel about the stimulus package, some of it is going to stick and the economy should stabilize in the second or third quarter,” said Bruce Bittles the Nashville- based chief investment strategist at Robert W. Baird & Co.“If that’s going to happen, the market will sniff it out.”

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Last Friday Gold surged US$37.50, crossing the US$857 oz. resistance, touching US$903.50 oz., and settled back to US$895.30 oz. on the close. That move suggests that there is huge buying power in the Gold market, and shorts are covering. Frequently after a breakout a market will back and fill, but the Gold players now are calling last week’s action with the breakout they have been expecting since last November/December. If that be the case, the price of Gold should rise to challenge the next resistance level at US$ 920, confirming a firm up-trend.

The Gold Bugs say this: Always invest with the primary trend. Gold’s primary trend is up, targeting at least $3,130.00; silver’s primary is up, targeting 16:1 gold/silver ratio or $195 .66; stocks’ primary trend is down, targeting the DJIA at under 2,900 and worth only one ounce of Gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

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The U.S. DVD market might be headed the way of the silent movies, as sales down for a second straight year, DVDs continue to lose their luster, while a deepening recession suggests entertainment conglomerate stocks won’t shine any time soon, Analyst’s cite data from trade group Digital Entertainment Group, which shows that US consumer spending on home entertainment fell 5.7% last year to US$22.4B, driven by a 6.3% decline in DVD sales direct to consumers, AKA “sell-through”.

Within sell-through, Blu-ray sales gained traction, while standard-definition DVD sales dropped 9.5%. Not only did sell-through demand deteriorate as the year unfolded, but the drop also “appears to be most pronounced among new releases,” with unit sales down nearly 20% in 2008, compared with a 6% decline in catalog titles. There are estimates in the market that US home entertainment spending to fall 7% in 2009, 6% in 2010 and another 7% in 2011.

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Last Friday all the market indices closed above their 50 day Moving Averages for the first time in several weeks signaling that the Bull regained the momentum in the closing sessions of last year and the opening sessions of this New Year, and they are now above what has been intermediate term resistance.

The market went up on low volume over the last three trading days, so we have to see what happens when the markets resume in earnest, and that should be the week of January 13. Lots of Bears have been out playing in the Snow, and when they come back to town they likely will take another swipe at the markets and send the S&P back to the line, the 20 DMA, 885, on a retest. If there is a decent recovery off of that retest, then more optimism will be in the air. A reminder, historically January is a quixotic (irrational and not predictable) market month, also it is the Year of the Ox (Bull) and the US will have it’s new president in office on January 21.

Stay tuned…

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Reading the article on next week carefully. Millions of investors are at risk because the market sees as much misinvesting activity in stock as it does investing I know it sounds weird, but the situation is similar to your crazy Uncle Bill punching the accelerator rather than the brakes when heading right toward the Grand Canyon he knows that he needs to do something, but he chooses the wrong mechanism. Stocks are tools you can use to build your wealth. When used wisely, for the right purpose and in the right environment, they do a great job. But when improperly applied, they can lead to disaster.

This week, I show you how to choose the right investments, base on your short-term and long-term financial goals. I also show you how to decide on your purpose for investing (growth or income investing) and the style of investing - conservative or aggressive - that you need to take.

Before you read our blog next week please reading our previous article on this cateorgies

What is Stock Market

Basic of Stock Market

How to start investing in stock market

Once again read our Penny StockBlog carefully on next week because it is very important to trade Penny Stock.

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