Friday, July 24, 2009

Premarket July 24th, 2009

I believe we are still in the 7,800 to 9,300 range in the market and will have that major pullback I have been waiting for in the Fall. I expect the market to go down and retest the lows sometime by Options expiration in October. My reasoning is that business is not good anywhere and that any surprise profits are coming from cutting costs, not an increase in revenues. Unemployment is still rising and without that abating it's hard to see a true recovery taking place. While traveling in remote areas of upstate NY between Buffalo and the lower tier near Amish country, my wife and I saw many homes and farms for sale, one after another. The only place having any customers was WalMart and Dollar General, where everything is a dollar.

In the chart below from Chart of the Day, it shows expectations of the lowest earnings for companies since before 1929. That is not good at all.

And yes we will be in a period of inflation where whatever money we have will be worth far less 10 years from now, than we can today. Owning hard assets is the only protection against inflation, as cash will be worthless. So owning property, income generating property, Gold, Silver and anything that will appreciate as inflation increases, is the play for the future.

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