Optimism is Back. Should You Buy Stocks Now?
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“The DJIA has been stuck in the low 9,000 point range for most of August, but the talk of "a new bull market," "a V-shaped recovery," and tributes to the Federal Reserve for saving the day are getting louder. The optimism is back.....”
“And that's exactly why most investors buy at market tops and sell at bottoms. “
“What to Expect in Wave 2 -- Wave 2 could carry the Dow as high as 10,000... Wave 2, regardless of its extent, should regenerate substantial feelings of optimism. At its peak...the government will be taking credit for successfully bailing out the economy, the Fed will appear to have saved the banking system, and investors will be convinced that the bear market is behind us. Be prepared for this environment; it will be hard for most investors to resist. The perverse result of wave 2 will be to get people even more heavily invested than they already are, just before wave 3 starts.”
Above extracted from Elliott Wave International's Article "Optimism is Back. Should You Buy Stocks Now?", August 20, 2009. Read more - click on same title in box at right side bar of this blog.
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