Thursday, August 28, 2008

Don't Buy The Rally

Stocks rallied today boosted mostly by the positive new on GDP and the job number.  I don't have any faith in this rally.  I look around, and I see weakness all over the place.  I see weakness at work, hence the layoffs, and I work in a market segment that should be ahead of the economy.  I see weakness when I just pay attention to the things around me like people talking about how they are struggling, rising prices, or people I know out of a job.

I am still circling, trying to figure out how to deploy my cash that is sitting on the sidelines.  I am looking closely at the financials, which have rallied very strongly over the last and have made me less interested.  I even would like to look at a few select retailers.  Expectations in these two sectors are quite low, so there might only be upside.  However, I do believe that the worse for the economy is only ahead of us.

The housing market still has a ways to go down from here.  I look around where I live, Southern California, which is supposed to be the epicenter of the housing crash.  I still don't buy at these levels.  I've seen houses still trying to sell for MORE money then they sold just two years ago.  I have a strong desire to buy, the capital, and the income to be able to buy, and I still have no plans on buying.

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