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  • Getting Ready for the Huge Q4 Rally [Edit or Delete]4 comments
    Jun 16, 2011 7:09 PM | about stocks: UGA
    Market update

    Looks like we're seeing a massive short squeeze heading into tomorrow and next week. If you look at the 1 year chart for the SPX you will see the selling is on low volume and orderly ;
    Despite bad RIMM earnings the futures tonight are up huge for some reason
    Furthermore, the magnitude of the selling isn't substantial-just 90 points off the S&P 500 high after a 100% rally from March 2009 lows. We'll be above 1350 in no time.

    Getting Ready for the Huge Q4 Rally

    To find the perfect historical analogue to today you only need to look as far back as last year. It was the same inane stories dominating the headlines as now. The same boo-hoo-hoo who is me doom and gloom crap.
    2010: Greece, euro crisis, double dip recession, high unemployment, falling home prices, debt, flash crash
    Now: Greece again, Euro crisis again, more double dip talk, high unemployment, even lower home prices, more debt 
    The only thing that hasn't happened yet is the massive 4th quarter rally, and I'm certain there will be another one this year. In 2010 stocks surged in the 3rd and 4th quarters due to blowout profits &  earnings, huge gains in exports & worker productivity, and permanently low rates. Those crucial ingredients for a rally are still intact and that's why smart investors are buying the dips now.
    But what about home prices? What about debt and Greece? Aren't those things important? 
    In reality, these problems are either very easy to remedy and or will have a negligible impact on GDP, profits and earnings. Greece will get some sort of bailout in the coming months. There's too much cheap, easy money lying around to let it default. That should lift the indexes by a percent or so. When the debt  deadline comes around the republicans will work out a compromise to kick the can down the road a little longer and that should be good for another rally in stocks. Republicans talk tough on debt , but they have stock portfolios and they would rather kick the can then lose money. With treasury yields still at record lows what we're really witnessing is merely political posturing than an actual debt crisis. 

    Additionally, a lot of bad news is already priced in so anything 'less bad' will be met with buying. Consumer confidence, retail sales, home prices, unemployment claims, manufacturing, etc won't trigger any big selloffs anymore.
    I'm predicting S&P 500 Q3 earnings (reported in the 4th quarter of 2011) will be blowout, finally putting an end to the double-dip nonsense. We'll see more profits, more earnings, and surging commodity & stock prices. Oil $120 by year-end, dow 13500, gold $1650, silver $60, gas $4.8/gallon nationwide. We'll hear the usual  whining by the TV and blog pundits about pain at the pump due to evil speculators and whining about the high unemployment rate. 
    Stocks: UGA
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  • gold is already at 1650.
    commodities are surging and now there seems to be a negative correlation between gold and stocks.
    how's that going to add to the rally.
    unless a huge stimulus package is coming up (or QE3), I see the S&P around 1100-1230 by year's end. but if that happens, gold will be much higher than 1650. some say 2k by january
    2 Aug 2011, 04:41 PM Reply Like
  • Stocks and gold can rally together as has been the case for the past decade. See no reason for this trend to change.
    24 Aug 2011, 11:59 AM Reply Like
  • You must sell stocks for a living. It must be nice living insode your head with Santa Claus and the Easter Bunny.
    3 Aug 2011, 01:57 PM Reply Like
  • its great being able to read this post in retrospect, ... there may still be a fourth quarter rally ( after more pain ahead first, probably) but if you had taken this artice "get ready for huge rally) and bought stocks when the article came out,(july 28) most likely you would be HURTING.
    3 Sep 2011, 12:05 AM Reply Like
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