{"id":26124,"date":"2011-12-20T22:16:19","date_gmt":"2011-12-21T03:16:19","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/12\/20\/why-you-should-ignore-the-stock-market-until-9-january\/"},"modified":"2011-12-20T22:16:19","modified_gmt":"2011-12-21T03:16:19","slug":"why-you-should-ignore-the-stock-market-until-9-january","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/12\/20\/why-you-should-ignore-the-stock-market-until-9-january\/","title":{"rendered":"Why You Should Ignore the Stock Market Until 9 January"},"content":{"rendered":"

By MoneyMorning.com.au<\/strong><\/p>\n

“The Dow Jones Industrial Average soared 337.17 points, or 2.87 per cent, to 12,103.43, registering its biggest gain since November 30. The rally propelled the blue-chip Dow into positive territory for the month. It is up 4.5 per cent this year.” – Dow Jones Newswires<\/em><\/p>\n

In other words, nearly two-thirds of the Dow’s gain this year came from this morning’s stock market<\/strong> action.<\/p>\n

So forgive us if we don’t get too excited about an economic recovery.<\/p>\n

<\/span>
\nWe asked Slipstream Trader<\/a><\/em>, Murray Dawes to give us his thoughts for the year ahead in the latest issue of Australian Small-Cap Investigator<\/a><\/em> (due out today).<\/p>\n

One highlight is this:<\/p>\n

“Therefore the road forward for stocks will be gut-wrenching sell-offs followed by super spikes on the back of money printing. But each episode of money printing will have less effect on the market than the previous one.”<\/em><\/p>\n

Stock Market Super Spikes<\/center><\/H2>
\nYou only have to look at the Dow Jones Industrial Average chart for the past year to see the “gut-wrenching sell-offs”<\/em> and “super spikes”<\/em> Murray’s talking about:<\/p>\n
\"Dow<\/a>
Click here<\/a> to enlarge<\/div>\n

<\/p>\n

Source: Google Finance<\/div>\n

<\/em>
\nThe key point is you’ll see more of these sell-offs and super spikes in the year ahead.<\/p>\n

By the way, as we write, Murray is recording his latest free stock market update<\/a> video. To watch it on his YouTube channel later today, click market update<\/a>.<\/p>\n

So, what caused this morning’s stock market excitement?<\/p>\n

According to the same Dow Jones Newswires report:<\/p>\n

“US stocks surged as domestic home building jumped to the highest level in nearly two years and another successful Spanish debt auction buoyed investor sentiment.”<\/em><\/p>\n

Remember, this is a housing market that – according to investment bank, Goldman Sachs – has over two years of supply on the market. Put another way, at the moment supply exceeds demand by more than 24 times!<\/p>\n

And we’re supposed to get excited that the U.S. is building more<\/em> new homes.<\/p>\n

Forget About the Stock Market<\/H3><\/ center >
\nWhat this shows you is the stock market is grasping at straws… looking for any excuse to go up. But as usual, the Aussie stock market loves it.<\/p>\n

This morning, Australian stocks are up over 2%. Everything is going up: banks, resources stocks<\/a>… even the retailers<\/a> everyone hated just two days ago. Billabong [ASX: BBG]<\/strong> is up 1.9% as we write… of course it has fallen 50% since last Friday.<\/p>\n

And don’t forget the S&P\/ASX 200 is still down 12.7% for the year… and 17% below the worst-case forecast by the big financial institutions at the start of the year.<\/p>\n

The question is, after the Santa Rally<\/a> made a false start at the end of November, is this the start of the real Santa Rally? Could be. But we’ll say this…<\/p>\n

Just as the stock market quickly turned on a sixpence sending stocks crashing nearly 10% in just over two weeks, there’s nothing to say the same won’t happen again.<\/p>\n

If you’re planning on taking a couple of weeks off over the Christmas and New Year holiday, we’d suggest cutting back on your exposure to the stock market. Sure, have a couple of irons in the fire just in case the market rally<\/a> lasts.<\/p>\n

But there’s just as high a chance the stock market will go down again before you know it.<\/p>\n

As a fundamental investor (someone who looks at what the company does and how it does it) we’ve largely sat on the sidelines for the past six months. And we’re glad we have.<\/p>\n

Soon will be a great opportunity to buy. We’re just not there yet.<\/p>\n

Our tip is, enjoy the holidays and don’t pay too much attention to the stock market. Because odds are, when you come back from holidays in January, the market will be roughly where it is today… and you’ll have missed out on nothing.<\/p>\n

Cheers.
\nKris<\/strong><\/p>\n

Related Articles<\/em><\/strong><\/p>\n

Entrepreneurs and Entrepreneurialism<\/a><\/p>\n

How to Buy Gold and Silver<\/a><\/p>\n

The Only Gold and Silver Stocks to Buy<\/a><\/p>\n

The Secret Aussie ‘Bank Run’ is a Sign to Buy Gold<\/a><\/p>\n

Why Gold Should Become Your ‘Stay Rich’ Asset<\/a><\/p>\n

From the Archives…<\/em><\/strong><\/p>\n

A More Profitable Investment Than Cheap Gold?<\/a>
\n2011-12-16 – Aaron Tyrrell<\/p>\n

The Best Property Investment in the World<\/a>
\n2011-12-15 – Aaron Tyrrell<\/p>\n

Is This the Gold Buying Dip You’ve Waited For?<\/a>
\n2011-12-14 – Kris Sayce<\/p>\n

Is Now a Good Time to Invest in Stocks?<\/a>
\n2011-12-13 – Kris Sayce<\/p>\n

Why You Shouldn’t Trust Your Gold to a Banker<\/a>
\n2011-12-12 – Kris Sayce<\/p>\n

For editorial enquiries and feedback, email moneymorning@moneymorning.com.au<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nWhy You Should Ignore the Stock Market Until 9 January <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au “The Dow Jones Industrial Average soared 337.17 points, or 2.87 per cent, to 12,103.43, registering its biggest gain since November 30. The rally propelled the blue-chip Dow into positive territory for the month. It is up 4.5 per cent this year.” – Dow Jones Newswires In other words, nearly two-thirds of the Dow’s … <\/p>\n

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