So for all chart lovers out there obviously the technicals are saying sell now buy much lower later. But at what point do the fundamentals take over and allow stocks the freedom to break out of the shackles of resistance and double/triple tops?
How about the job creation numbers and jobless claim trends?
If deterioration in the financial, employment and housing markets could cause an economic collapse then what does improving trends in employment say about future stability in housing along with the possibility of growth that exceeds 3%? Not to mention growing stability on the balance sheets of major banks. Does more employment mean the steel sector sees more demand via the auto and construction industry? Maybe the bulk shippers see some multiple expansion? Maybe banks pick up steam due to higher loan demand? Maybe some good ol' fashioned M&A activity kicks in? What multiple do we put on the market when those maybe's turn into facts?
For all those worrying about greece I saw there is much to worry about if you got relatives over there or if you happen to be reading this from the ancient land of greece. But there is enough strength within the EU to balance out a lost decade or two in greece. Their compadres within the PIIGS present similar challenges but their economies are larger and along with greece, have room for deregulatory reforms within the private sector that could prove to be beneficial in the long term.
Now stateside, the push for more infrastructure and education spending has been building momentum. Unless fringe elements on the right take over the executive and legislative branches my belief is that the U.S. will see the kind of infrastructure and education spending that historically leads to greater GDP growth. Even if the president wins a second term without congressional elections going the way of the white house with a super majority in the senate, there should be a clear mandate to spend on education and infrastructure handed to the president from the public post election.
Then again...I could be wrong!
Additional disclosure: My post isn't really about specific stocks but is more about a theme involving fundamentals vs technicals and when we should look toward the future based on the economy improving. I listed my positions just for the sake of disclosing that I'm net long.