"No man can become rich without himself enriching others"
Andrew Carnegie

Thursday, February 7, 2013

Investors Should Step Up to the Plate and Buy

 It's time to sell bonds, reduce non-interest bearing deposits, and put the proceeds to work in stocks

Trade of the Day Chart Key
I like to occasionally refer to the NYSE Composite index for guidance, since it is comprised of every equity traded on the New York Stock Exchange.
It was the first of the major indices to break from the consolidation that began in September with a powerful breakaway gap, and it made a new high as recently as Friday. 
The first support for the index is at its 20-day moving average at 8,823, then the uptrend line at about 8,700, and finally its 50-day moving average and support line at about 8,560. Like the other indices, its MACD is overbought, but that is not important until the short-term trendline at 8,700 is broken.
Monday’s sell-off was the worst of the year and startled many investors with its ferocity. However, the S&P 500 proved its resilience by reversing on Tuesday to a new intraday high. This remarkable performance demonstrates the power of the current bull market and should encourage those who have not yet become convinced to sell their bonds, reduce their non-interest bearing deposits, and put the proceeds to work in high-quality stocks paying strong dividends.
Conclusion: Investors who have not yet made a long-term commitment should step up and do it now. Traders may want to wait for a short-term correction, but long-term buyers should not be influenced by daily, or even weekly, stock market gyrations. 
Blue-chip stocks offer relatively high dividend returns versus nothing in money market funds — plus, they offer the probability of an additional 5% to 15% appreciation in 2013. ...

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