Dear Fellow-Investor.
I'm back from a fantastic vacation on the Azores and upon checking my e-mails I got several mails from my subscribers asking whether the markets have overheated being afraid of a major crash, especially after the Dow Jones has gone for quite a roller coaster ride in the past 3 weeks, losing 100 point in one session and gaining
100 the next.
This anxiety is more than understandable considering what happened in 1999. The Dow as well as the all other indices world-wide climbed from one high to the other. The drastic turn around came very painfully in March 2000 when the world markets were at their all-time highs and went for a 3 year decline eradicating billions of Dollars, Euros, Pounds and Yen.
What we are seeing right now is pure psychology again - as it usually is! Investors take one step forward and one step back the next day being unsure and insecure whether the markets can keep this high level.
From what I can see, they can. At least up to a certain point. We will always see corrections here and then. But the situation is different than back in 2000. Today, investors are way more careful of what they buy. Most don't rake up every single cent they have anymore in order to buy stocks and most avoid these highly speculative stocks that were so popular back in 1999 hoping to make the big bucks fast. Also, the markets are by far more stable and the regulatory authorities, like the SEC and FED, are way more vigilant about the daily market activities and economic situation.
So the markets have reached their positions rightly, and still there are plenty of stocks that are way too low and totally undervalued like Cicso Systems or Nokia for instance. These 2 companies are making billions of profits again, but no one really seems to be interested in them. But also that will change!
Today stocks kept a slight upward tilt after the Federal Reserve left interest rates unchanged and said that economic growth should continue at a moderate pace, while inflation remained its top concern.
We are in a Neutral trading bias in both the DOW and S&P indices. The NASDAQ, however, seems to demonstrate a slight Bullish flair.
Yours in Successful Trading,
Ricky Schmidt
www.stockbreakthroughs.com
www.stockbreakthroughs.com/option
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