For months, Greece and probably the whole of Europe has been struggling financially over debt. Probably an unpopular decision that made lots of people furious, Greek PM George Papandreou called out a referendum for Greece's latest bailout package. Is this something good or not? We never know but probably what is certain is that the market may continue to move sideways or probably down if Greece and Europe can't show any signs of development.
As far as PHISIX is concerned, some stocks have shown resiliency. Because of the uncertainty in Greece, I think that the mining and oil sector will still hold strong. Anything related to oil (such as power generation and energy) may have some momentum as well.
Since nobody can predict the market, stocks may appear cheap now but still may continue to go lower. Keep in mind that during a market recovery, blue chips move so fast (just like DMC and JGS after 2008) preceded by penny stocks.
Two scenarios: [1] Market moving sideways, or [2] Market going down. So what are we going to do in each scenario?
Scenario 1: We have noticed Dow has been moving inside a channel. It drops for two or three days and goes back up for almost the same number of days. We can take advantage of such behavior by anticipating when will it go up and down.
Scenario 2: Because of the turmoil in Greece, it might be wise to stay away from the market for a while. This is a very risky time for both traders and investors. For investors who are looking for the best value for their money, wait a little longer and get in when the market shows some legitimate strength. For value investors, stocks are cheap right now and whether or not they continue to go down, the upside is huge.
No comments:
Post a Comment