You make the call

So here's where we are right now. The stock market is having a great week thanks to earnings surprises from companies like Goldman Sachs, JPMorgan Chase, Google, and IBM. More good news is expected later from General Electric and others. This has kept bad news from CIT from ruining the fun. The market is trying to recover from 4 down weeks, after it's 40% run up from the March lows. Pundits are now seeing the Green Shoots and signs of recovery from this economic crisis and recession that has dogged the world for the past 19 months and counting. Inflation fears have been abated for now as there is a more short term concern of deflation. While inflation could come back, it is not expected to be a problem until 2011 or later. Still, some bears out there are not convinced and are predicting a retest of the March lows, one call for the S&P 500 to drop to 600 and so on. So what does all this mean for the small investor? Stick to your plan. Invest in the areas you need to be in. Monitor your investments and make changes as needed. A long term view is still better than a short term look out the back window. Stay diversified and keep saving. Putting your money under the mattress may make you feel better for a moment, but it will not help you reach your long term goals! You gotta make the call!

Twitter Wednesday

Another busy week in the markets with more companies reporting earnings and more analysts checking to see if they are better or worse than expected. So far the markets have had 2 up days this week and are trying to break out of this 4 week losing streak. Bank of America and Citibank will be reporting this week, but cannot expect to have the surprise earnings that Goldman Sachs did. I will be posting updates via Twitter as I head off to a sales meeting his morning. Follow me @scottjwheeler or check the Twitter updates on the lower right hand column of this page.

Banking Crisis is over!

Over the weekend, I read two interesting stories by people who have put themselves on the line and said in all sincerity that the banking crisis is over! First it was the Chairman of Barclays Bank in London who said that the banking crisis is over, but the nasty global recession could go on a while longer. Next up, Donald Luskin, chief investment officer of Trend Macrolytics, who also said in an article posted on Smartmoney, that the banking crisis is over. Luskin goes on to say that while the Obama administration did a wonderful job ending the banking crisis, they did not do so well in other areas. Luskin also thinks that the recession and the bear market is over and investors will have to be skillful in their trades to make money in the markets going forward. Long term investing may be obsolete. Traders will have to buy on the dips and sell in the rallies, he says. Notice he didn't say get out of the market, he just said, be nimble and trade carefully. This has been the manta of investing for all time, buy low and sell high. Everyone has heard that before. The problem for most investors is they don't know when to sell. No one wants to sell a loser and admit they made a mistake. To win in investing you have to be right more times than you are wrong. Sometimes you need to sell to cut your losses and prevent further losses from occurring. Ask your self the question, would I buy this stock today? If not, then why do you want to keep it in your portfolio? What's your next move?

It's good to be not so bad

In the strange world of investing, sometimes news that is bad, is really good news. Yesterday Alcoa posted their 2nd quarter earnings and analysts got to pour over the report and compare it to their forecast. Surprise! Despite posting their 3rd consecutive quarterly loss in a row, the company beat the forecasted loss of 38 cents per share, by 12 cents! In other words, even thought they reported a loss of 26 cents per share, that was not as bad as expected, which was good news for the company and the stock. Shares of the stock gained for the day and surged even higher in after-hours trading. So what does this all mean? Well, Alcoa is one of the companies represented in the Dow Jones Industrial Average. In addition, they are considered a bell weather stock and a barometer for how other companies might do in the coming weeks as more earning reports are published. The good news reported by Alcoa yesterday is that they see signs of recovery in the global economy. So all the bears out there thinking that we could retest the March lows, could be in for a surprise themselves. Who's camp are you in?

Twitter Updates

This week is a busy week. The beginning of earnings season, the G-8 Summit meetings, and so on.

I have a busy week also, so will be doing my updates via Twitter. Scroll down and view the Twitter updates on the right hand column below or follow me on Twitter @scottjwheeler. Stay invested!

Earnings Season!

I used to love the old Bugs Bunny cartoons with Elmer Fudd and Daffy Duck, when they would argue about whether it was rabbit season or duck season. As anyone who follows the stock market knows, it's now earnings season! This is when companies put out their most recent quarterly earnings for the analysts to review and comment. Generally there are surprises. When a company surprises the analysts with good news, it is good for the stock, and when they surprise with bad news, well, it can be bad. Most of the so-called, stock market gurus, are deciding whether we are currently in a "correction" phase, following a recent 40% upswing in the market since March, or whether we are in a more prolonged downward spiral which could test the lows from March, as speculation arises on the lack of strength in the current economy. Many people are questioning if the stimulus package is working and if another one is needed. Some suggest that the effects of the stimulus money are going to present itself in the coming months. Others, like even VP Joe Biden, are wondering if it was enough. The recent volatility in the stock markets suggest that one approach for long term investors might be sector rotation. That is looking at the strong sectors or asset classes in the stock market for possible buys, and selling the weak sectors. This can be a rewarding strategy for those ready to carefully monitor the market aggressively. Many people are pointing to technology as a key sector own right now. As always, if you need help, look for a good coach. Your portfolio should be customized for you. A magazine article or newspaper column can't design a proper strategy for all people, unless you like to follow the herd!

Unemployment

Unemployment is certainly bad for those people who have lost their jobs, but for those who look at the unemployment numbers for a direction of things to come in the stock market, it's a different story. Yesterday's jobs report sent the stock market reeling as the data showed that more jobs were lost in the month of June than previously expected. But if you look at the stock market history, enemployment usually peaks after a recession is over and the stock markets begin a new bull market period. The jobs report is a lagging market indicator and should not have caused a sell off like what happened yesterday. Strange things happen in short holiday weeks like this, when most traders are gone. One should expect a pullback after strong ralleys like we have recently seen, so don't let one bad day scare you back out of the market. Cash is still king when looking for opportunities. The need for diversification of assets is greater than ever, and tactical moves are needed to stay ahead of the herd. Get your game face on and get back in the playing field!