Sunday, August 21, 2011

The Week Ahead

The Week Ahead: Bold Predictions – Lasting Thought

The markets fear a recession. The Middle East is stabilizing. Gold is approaching $1,900, and 30-year treasuries remain near all-time lows

1 – Crude Oil spot per barrel settled in the low 80’s last week. As the Middle East stabilizes and the markets continue to fear slow economic growth – speculation on the energy market may continue to subside for the week. Let’s plan on mid-70’s by the end of the work week.

2 – There were two stocks took huge beatings on the NYSE last Friday, Hollysys (HOLI) and LDK Solar (LDK) losing almost 20% and 23% respectively. Both companies are Chinese-based corporations, boing a majority of business in China, have high-growth prospects, and deal with fairly lucrative high-technology products with good margins. Even better Hollysys trades at a 6.2 PE and LDK trades at a 1.7 PE as both near 52-week lows. I expect investors to quickly rationalize that these are potential bargains – expect to see a few days in the green this week.

3 – Can interest rates go lower? ABSOLUTELY. But this is not the week. I expect nice rebound in rates especially the longer-term bonds. TBT – the ProShares UltraShort Long-term Treasuries will be a nice play for the coming week.

Lets see how this week unfolds – next Sunday night I will be certain to visit my predictions and analyze what went right and most importantly where it all feel apart.

*Also, I believe I need to note for legal purposes I do own all of the specific stocks aforementioned. It’s a pretty shitty move to make predictions and sit on the sidelines.

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