Monday, August 3, 2009

Is This Bear Market Stock Rally Losing Steam?

Be careful with what you are doing with your stock investments. Do not be tempted to chase the stock market higher here. In fact, it would be prudent to sell into this rally and be grateful for what the Fed/Government has done for your investment accounts since the March lows.

Please don't be fooled by the analysts who will come out and exclaim that today's auto sales indicate a recovery. The Cash For Clunkers program was responsible for a brief uptick in auto sales at the end of the month. Ford even admitted as much. In fact, most dealers where conducting pre-sales in anticipation of the program's commencement.

I don't agree that the Government should be using tax money to subsidize auto sales, but this is a one-time phenomenom that will hurt "organic" sales in the future.

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