Written by Nathan White, CFA
Much of our quantitative work indicates that the stock market is setting itself up for an intermediate term rally that would start to develop over the next few months.
This rally could propel the S&P 500 into the 950-1000 range.
Negative sentiment is running wild with nearly everyone giving into the bear. Emotions are running high. This is a contrarian sign.
One catalyst to begin a rally is to get the White House and Congress to stop giving daily speeches and TV appearances!
It is flat out amazing to see the markets sell off every time the President speaks. The recent sell-off in the markets has been caused by all of the uncertainty created by the government.
NO one knows what the rules of the game will be or what to expect and so the markets continue to pull back. The markets are pushing the government to act and create some sort of credible end game to the financial/credit mess. Government inaction is causing the markets to price in all bad scenarios with the banks.
In light of the current choppy conditions, our Top Flight Portfolio still holds some defensive sectors such as Conservative Staples and Health care.
We have steadily been moving the portfolio towards those areas that would do best in a broad market rally such as Technology, Materials and some emerging markets. If a bull trend develops we will increase our allocation to these areas. If the bear trend resumes, we will take off the more aggressive portions of the portfolio.
Stay tuned...
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R.S.V.P.
Shannon Golladay
801-375-2500
shannon at paragonwealth.com
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thanks for good information........
:)
Posted by: technomart | Wednesday, February 25, 2009 at 11:17 PM