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Lulupoopsalot (86.88)

Are you ready for this Foolish rally?

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August 05, 2012 – Comments (5) | RELATED TICKERS: SPY , DIA

 

Looking at the S&P 500 long term chart there seems to be a trend.  The S&P 500, measured from August to the end of the year, is almost always higher (with the notable exception of 2008, the infamous housing market crash) during Presidential election cycles.  I'm sure we could speculate as to why and how but it's really not the point of the article.  This is more like a heads up to all you foolish readers that if history repeats itself, as it often does, this might be a perfect time to buy some short term trades.

Of course if this is true then buying the broader indices (SPY, DIA) are a given.  But what about other plays?  

I know you've been looking at those European energy and utility stocks like I have (NGG, BP, TOT, E).  Those high yields are looking mighty attractive, aren't they?

European banks (DB, UBS, BCS, SAN) sure look really cheap right now.  Maybe you like the American prospects in financials and would look to take some risk (BAC, C) in beaten down banks?

Perhaps you've been looking at basic materials for a while and think they (BHP, VALE, RIO, FCX) are a bargain at these super low PE's?

That drought is for real in the midwest and now soy is in trouble so fertilizer (TNH, CF, MOS, POT) might be in higher demand by those wanting to maximize yield for these historic prices?

Or you could be like me and think that the high end consumer isn't dead, just cautious right now, and certain stores (M, TIF) are a steal.

 I'm going out on a limb here but I've noticed we've been in a upwards trading channel since June.  I predict it will hold firm through the end of the year and the DJIA will see 13,750 (possibly higher) within two weeks front or back of Dec. 31st.  I'm going one step further and predicting that financials, materials, energy, and capital/consumer goods will be leaders during this rally.  I believe this rally will not be lead by technology as we've seen in the past, but by the broader market, therefore it will be far more sustainable and belivable to the investor.

 

5 Comments – Post Your Own

#1) On August 05, 2012 at 9:48 PM, portefeuille (99.60) wrote:



enlarge

(from here

 



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(from here)

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#2) On August 06, 2012 at 1:21 AM, awallejr (81.47) wrote:

Porte why are you calling 2012 a dip when it has been the opposite, although we still have August. As for BAC and C I still wouldn't touch those 2.  Play the BDCs instead.

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#3) On August 06, 2012 at 2:52 AM, portefeuille (99.60) wrote:

#2 a dip below the lower trend channel boundary.

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#4) On August 06, 2012 at 2:05 PM, Schmacko (56.66) wrote:

Portefeuille, what is your x-axis?  Is it just a count of days?

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#5) On August 06, 2012 at 4:56 PM, portefeuille (99.60) wrote:

#4 Yes, U.S. trading days. Day 0 is March 9, 2009.



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(from comment #6 here)

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