Monday, August 20, 2007

Finding Market Opportunity at the Start of the Week

Questions Following a Fed Move:
As we can see from the charts from the excellent Barchart site, gold has been in a trading range since late 2005. Meanwhile, the dollar has trended lower and interest rates are falling on anticipation of Fed cuts and a change in Fed policy away from inflation fighting and toward support of the economy.

Will we see a steepening of the yield curve, as the short end reflects Fed ease and the long end anticipates inflationary pressures? If so, how would that affect gold? How would that affect the prospects for a housing recovery? How would that affect the stock market?

Which Stocks Benefit From a Turnaround?: Check out James Altucher's excellent post to, noting the rocket stocks likely to bounce when stocks rebound from a high VIX decline. See also the financial stocks that two savvy investors are buying up; lots of good trade ideas in that post.

Trading Techniques - I've gotten a number of "how to trade" email requests from new readers who are also relatively new traders. Here's an overview of past posts to the blog on trading methods; see also this recent post and the links it takes you to.

Historical Perspectives on Past Fed Interventions and Market Declines: The Big Picture summarizes several worthy articles from WSJ Online and compares the current period to 1998 and 1987.

Investor Perspective on the Decline: A Dash of Insight offers its view of how investors should handle declines such as the present one and finds two stocks that are not reflecting fundamentals.