The Shadow Stock Trader
December 5, 2008
By Horacio Marquez
Email – #37
** Despite very bad economic news, the market and all our positions rally strongly
There are many shorts in the markets that have made a killing this year. And the year-end is coming very soon. So very few trading days remain to for the shorts take their profits, which means good news to us in the long term.
In addition, last week we saw a massive stimulus package from China, coupled with a huge drop rates by their Central Bank. Then the US committed to and brought mortgage rates down. This week, the ECB jumped in with a 0.75% rate cut, and the European Union launched their own fiscal stimulus.
The horrible employment numbers are the product of the wall into which the US and global economies ran into in October. But the markets are, in the words of Wayne Gretzky “skating to where the puck will be, rather than where it is today.” The official announcement of a recession this week, dating it to last December, tells us that despite a prolonged negative outlook moving forward, we have already discounted a lot of the downside.
So some of the proverbial long term deep value players (remember them?) are putting some money to work.
The market will not be a straight line, and we will get major setbacks in the future, but we’ll take the gains when we have them.
All our positions are rallying strongly; for instance, the iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI), which we initiated last week is up “only” 7%. We will add some more on weakness.
Enjoy and profit,
Horacio Marquez
All Shadow StockTrader recommendations will be posted on the Money Map Press website. Simply go to http://www.moneymappress.com and click on “Money Shadow Stock Trader.”
Current Portfoli
Name: iShares Russell 2000 Index (NYSE: IWM)
Current Price: $45.93
Comments: Buy
Name: Biotech Holders Trust (AMEX: BBH)
Current Price: $160.33
Comments: Buy
Name: S&P DEP RECEIPTS (AMEX: SPY)
Current Price: $87.76
Comments: Buy
Name: Powershares DB Agriculture Fund (AMEX: DBA)
Current Price: $21.96
Comments: Buy
Name: Materials Select Sector SPDR (AMEX: XLB)
Current Price: $21.90
Comments: Buy
Name: HealthShares Enabling Technologies (NYSE: HHV)
Current Price: $21.15
Comments: Buy
Name: Energy Select Sector SPDR (AMEX: XLE)
Current Price: $43.72
Comments: Buy
Market Watch
NASDAQ
1462.11
0.00
SP 500
778.12
0.00
DJIA
7395.70
+178.73
As Of 5:33AM 3/18/2009
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