Wall Street has formed a fairly solid consensus that corporate earnings will spike in 2010. This may well be true, but stock prices may have already priced this in.
Mark Gongloff in WSJ " The forecast of Wall Street Analysts is that companies in the S&P 500 will earn 77.54 per share averaged , which would imply a 30% gain from 2009. Numbers will vary on this, but it all comes down to the S&P 500 is now trading at 15 times earnings (the most optimistic of an forecast)"
So, slow steady economic growth. Thicker margins, as companies will be slow to rehire (higher unemployment rate), the new $30 billion in tax breaks for businesses will help, and most importantly exactly half of the S &P 500 will derive its income globally, not in the U.S. by mid 2010.
You can be sure companies that are cash rich will start buying back shares. This will boost earnings per share.
Today we would like to share with you the results of our 2009 Stock Portfolio Performance. Remember, we recommend selling in Floydian 1/3's, which is to sell 1/3 at 20 to 30% profit, the second third at 40 to 50% profit, and to hold the final third.
We also believe in "bottom buying", which is adding to a position aggressively on downturns, if the position itself maintains viabilitiy, and is just caught in a downturn.
This has allowed Blue Chip Options to achieve some excellent results in 2009. All of our holdings are always updated regularly on the website, in our Floydian Shifty Fifty document, and in constantly updated stock charts.
Remember, we've just added 10 new videos to the website on pnf charting.
Option Traders: We see two way trades on all the indices this week. Buy January ITM call and put, making a larger second buy to the first losing signal. Try to buy the opposing signal at least 20% below prior day close. Stop Losses: End of this week.
Take reasonable, not greedy profits and you could two way trade this week.
