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Massive Cash on the Sidelines Buying on Dips

By    |   Tuesday, 04 Aug 2009 12:18 PM

Last week the market again rolled to new 2009 highs despite many pundits preaching a pullback.

I said then that the Chinese would continue to buy our debt, and the 7-year auction went better than expected. Rates of 10-year bonds have stabilized around 3.65 percent which is bullish for stocks

Also, I said the earnings catalyst will continue to drive the market and a run towards S&P 1,000 is not of the question. That happened yesterday.

Last week I said, “If Altria can break the intraday high of 17.63, that is very bullish and should aid the rush toward $18 per share.”

In fact Altria did break through 17.63 and continued to $18 where it pulled back to a new 2009 high, as predicted.

Those who have read the monthly reports have seen me predict that the U.S dollar would weaken as the year progressed. In fact it hit a new 2009 low on August 3.

Please continue to read and reread the old weekly and monthly reports. They are invaluable learning aids and you can clearly see your not-so-humble, but very accurate, correspondent has been dead on.

OK, enough applause. On to this coming week.

Each week the market keeps making higher lows and higher highs, and for the last four weeks a pullback has been predicted and not seen.

Massive amounts of money on the sidelines have been buying into any slight dip the market may have.

The earnings catalysts which fueled the markets as predicted will not be as powerful this week, but this market, although due for a slight pullback, is not overvalued, especially outside the technology and retail sectors.

I do see the dollar stabilizing in the next week or so, which should help stabilize oil in a $60 to $73 range.

This week’s range will probably be between 960 to 1,017 on the S&P.

If 1,017 is breached this week, which I doubt will happen, a run to 1,035 is not out of the question.

Although a slight pullback would not surprise me, the overall bias is upward.

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BillSpetrino
Last week the market again rolled to new 2009 highs despite many pundits preaching a pullback. I said then that the Chinese would continue to buy our debt, and the 7-year auction went better than expected. Rates of 10-year bonds have stabilized around 3.65 percent which is...
bill,spetrino,dividends
354
2009-18-04
Tuesday, 04 Aug 2009 12:18 PM
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