Dear Friends,
Sometimes the market needs to be in a place of brokenness for a time, in order for healing to mend it. And even though our desire to rush in and fix it, we can\\`t. The market has to work these things out for itself.
If you were to see a cocoon hanging from the limb of a tree, and you saw the cocoon begin to move and you knew a butterfly was inside struggling to get out. And in your compassion you take out a pair of scissors and cut carefully the bottom of the cocoon to help the butterfly to get free a little bit easier. In reality, the butterfly will fall out and fall to the ground and die. It will never fly if you did that. Because it is the struggle that causes the fluid to go from the body of the butterfly into the wings that will allow the butterfly to fly. Without the struggle he will not fly.
This market is struggling as prices continue to churn back and forth in a lateral range. But sooner or later the struggle will allow this market to spread its wings and fly again. Sometimes in the investment world, as hard as it might be, we must be patient and allow the market to struggle through the painful process of purging itself from any internal toxic pollutants that might be weighing it down.
The butterfly is a symbol of change, as a unique transformation process causes a caterpillar to turn into a butterfly. As a mysterious metamorphosis takes place, turning something that is rather gruesome in appearance into a very colorful and breathtaking butterfly. As traders and investors we must be patient and allow the metamorphosis process to have its way with this market. Some unwanted things have taken place in this economy and the market has had to take some time to price that into itself. But I don\\`t think the economic situation is as bleak as most people think it is.
Don\\`t write this market off yet! Ultimately, as the overall economy recovers so will the stock market. The market is not fooled by the naysayers. The market is marching to its own drummer. The stock market just has to struggle a bit in order to carve out a bottom. But I truly believe that in due time the market will recover. I believe that in early 2009 we will test the January all-time highs once again. The market went down a little further than I even anticipated, but when you have so much pessimism, from a media that pounds less growth into vulnerable Indians day after day it will cause repercussions. Such as the stock market becoming extremely oversold.
The institutions,FII\\`s sold off to take profits and rearrange their holdings. They want your shares cheap, so they ran the market down and caused investors to panic, and sell off after a sharp decline. Then the institutions will run the market back up again. Now the market has taken a hit and it will take longer to recover, but I believe that it will recover. I would say that the institutions are doing a very good job of fooling the majority of traders/investors into thinking that we are in a bear market. I believe that both the bear market prediction and the sluggish growth is a sham.
I really believe that the bear market scare is a brilliantly conceived and flawlessly executed plan by the institutions to get your shares. They have the capital to run it down, and they have the capital to run it back up. The bad news bears continue to insist that we are in a bear market. Well I am one of the few that openly challenge that ideology. I think time will prove them wrong.
I think in the near future US markets may surprise every one and will lead our markets to the past glory . They have been the cause for its fall worldwide and now they will be cause for its rise.
Regards,
Neil
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