Say Goodnight To The Great Rally Of 2009?
The action this week in the stock markets may indicate that the powerful rally is over. The S&P closed below its 50 day moving average today. Many stocks across the board are doing the same. Also worth noting, the stocks that are doing well seem to be the defensive stocks such as McDonalds (MCD), Wal-Mart (WMT) and Philip Morris Int’l (PM); i.e. the stocks that do well during a recession. The market action is definitely different. We will see if this is truly the start of a major correction or just a hiccup in this powerful rally.
As I’ve noted, I’ve held my short positions for months now, so you know where I stand. Can Uncle Sam continue to work it’s magic through more tax-funded subsidies that borrow from our future to “stimulate” consumption today? Or will economic reality finally start to be a factor in the stock market. We shall see.