Thursday, October 06, 2005

Now it's time for my market prediction:

As I posted on Kos yesterday
(while Blogger was asleep) several brokerage houses and Marketwatch's "technical" analysts (which are like entrails readers for all their vaunted savvy) predicted stocks to take off despite the obvious signs to all middle class folks: skyrocketing energy prices, prices at the pump, promises of unnatural natural gas prices, etc.

I could have added "health care costs exploding" (it cost me $50 bucks in co-pays alone to see the doctor and get a scrip filled the other day), and inflation at the vending machine...

Well my prediction: sell, sell, sell.

It's going to be one heck of an October for the market...Merrill says, btw...

In our opinion, investors appear overly complacent in the face of higher energy prices
and rising short-term interest rates, and we question the prevailing assumption that U.S.
consumers will be able to maintain their high spending levels. Additionally, we believe
that expectations for corporate earnings are overly optimistic, and we expect to see
earnings disappointments for the next couple of quarters. In this sort of environment, we
continue to recommend that investors follow a conservative investment strategy. Stocks
and bonds have both produced lackluster returns this year, and it is difficult to make a
case for major changes in this trend over the next six to 12 months. While we do not
expect a significant drop in equity prices, we would encourage investors to wait for a
less risky time before adopting a more aggressive investment stance. Equity investors should
look for buying opportunities, which could be signaled by signs that the Fed is pausing,
by lower stock prices as a result of disappointing earnings or by lower energy prices.

Which I guess is broker-speak for "Run away! Run away! Run away!"

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