By: Stefan Penkov
Last week was the obvious continuation of the Fed interest rate cut. The US dollar Index is reaching new historical lows and everything else is going higher...
It is hard to say something new and find a potential unsuspected detail to talk about. The markets are happy and the investors are following the flow in the chase of new and greater profits. On the other hand, you should be aware that nothing goes straight up. It is very possible that the next couple of weeks will give us the opportunity to buy more at a lower price. After 10 days of almost continuous increase we should witness 2-3 days of profit taking which will bring the prices down by about 4-5 %. Those of you who have not yet used all their cash to buy new positions should wait for these days to do it. It could happen any moment now. Especially that we have the October options due for the 19th which is always a good reason to have some good very short term fluctuations.
Take Google as an example! If you think that you are late to buy some shares or options, you are quite mistaken. At $567 the stock will probably go to about $680-$700 by mid-November. However, instead of jumping in right now, you should wait for the probable pullback which should bring it back to the $535-$545 range. Buying during the pullback will give you an additional 4-6% percent profit.
This fall looks a very good period for making profits and almost every sector will benefit from the Fed policy. As said at the beginning, the only place you should not invest in is the US dollar but if you have been following my newsletter you already know that.
Good investing and best regards,
Stefan Penkov
