David White

A Month of Seeing Red

Where do you think the market is going now? It has taken a hard hit today, even in the face of relatively good economic news (ISM and Construction Spending were better than expected). Also I read an article recently that said the housing market in Central Florida was stabilizing. I think the same can be said for California to some degree. Governor Swartzenegger went on record recently as predicting the California real estate market will turn upward in California in 2009. I know there are still some write down problems, but even Greenspan is saying that we are at least 2/3 through it. Do you think the stock market will turn upward now? Or will the S&P500 go right through its resistance level of 1250? To me it looks like it might hold (at least temporarily). I know there has been the flooding in the midwest. However, the grain futures have been down the last 2 days due to a report asserting that more acreage was planted this year (for corn). This means that even with the flooding, the food supply should not be much lower (if at all) than previous years. This should be good news for the markets. It make be temporarily bad news for Agriculture stocks. However, even the author writing about this seemed to think the report was too optimistic about the acreage that would be productive this year (after the flooding). To me this means that the Ag stocks can bounce back, and the inflation situation due to Ag is not too bad. I think this should allow the markets to move higher. What do you think?