Last week we saw the most promise in the economy since the recession began. Wall Street totals began to spike over the last two months and everything seems to be in place for a rise. Regrettably, traders were so cautious that the spike was deceptive that they under sold and the Dow Jones industrial average dropped 156 points. The four banks the government said were tough enough to outlast a worse economy just turned to Wall Street to sell extra stocks in order to pay the government off, and they are going to trade fine, strengthening the financial institutions.
Some analysts consider this is a tiny retreat after a great run, a good sign in a recuperating economy. In fact, a healthy economy jerks up and down the scale a slight bit as investors and traders get comfortable again. Despite the mistakes the government has made and the great, failing companies, the economy does seem to be getting better. One crucial point is that as currency loses value and becomes less safe, gold becomes the alternating investment, and prices skyrocket. It is no secret the price of gold hit record highs during this recession. Gold prices are now going downward.
If gold can stabilize where it was when the economy was healthier, life will be beautiful. Watch the gold prices. If gold goes downhill any further, especially in a even downward motion, it is time to sell and invest in stocks, because the stock market is rising up the opposite direction. If anyone has invested in gold, now is the time to sell it, because gold is still technically at a record high, whereas the stock market is at record lows. Sell your gold and/or begin investing in the market again. A huge number of buyers and excited activity strengthens the economy, and if you get in on the ground floor, you can ride it up, like the sensible investors you are. Bonds are also getting stronger. Keep an eye on both stocks and bonds, especially if you have gold to sell. That is the way to ride the market back up.
At the same time, economies have always seen high points and gone right back where they were. No recession is finished until the afflicted economy has shown a habit of much higher numbers and job recreation. Right now, we still have an average unemployment of around eight or nine percent. The high point here is that we have been holding a sturdy unemployment rate and the economy has essentially bottomed out. When the only way to go is up, that is likely what you will do, If the economy does revitalize soon, it will be in spite of the efforts of Wall Street, corporate America, and even the government.
Director of derivatives investment strategy for WJB Capital Group in New York, Scott Fullman, noted that the Dow has risen about 30 percent since March, about twice as much as the market might do in a full year of beefy gains. To take a break here is healthful, he said. Enter disagreement from Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York, who said the economy remains distressed beyond what many analysts concede and that he expects the market will dive again and perhaps breach the lowest levels of the first part of March.
In trying times such as these, America deserves fiscal responsibility and a combined society bent on resurrecting the market. America has yet to see either. The government is giving away tax money like it is indispensable, and that is hurting the market. It is likely that the economy would be much more promising without the bailouts last year and early this year. Every time a financial bill was passed, the economy would sink lower in expectation. The greed of the corporations has not helped either. In the words of country music artist John Rich, in his new song, They are selling make believe and we do not want to buy that here. When America does not buy writing from the lawmakers and economic powers-that-be, the economy suffers. That is why the economy is still so awful and America is latching onto any flicker of a revitalizing stock market, whether it is a good movement toward prosperity or a candle in the wind.
