All these price breakdowns among blue chips before the QE3-driven, low-volume rally signaled a shaky performance by the stock market this summer
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New York, NY (PRWEB) October 26, 2012
According to Mitchell Clark, financial expert and contributor to Profit Confidential, more and more blue chips are declining in price, many of which are blue chips that previously hit new record highs. Clark cites Starbucks as an example, reporting that in April of this year, Starbucks hit an all-time record high on the stock market of $62.00 a share, but has since declined to the $42.00-per-share level. (“MarketWatch,” The Wall Street Journal, last accessed October 25, 2012.) As Clark notes, blue chips like Starbucks are feeling the effects of austerity and slowing international growth.
Clark notes that Starbucks is another example of a previous stock market leader breaking down before the mini-rally, driven by a third round of quantitative easing (QE3), and not participating with it this past summer.
“All these price breakdowns among blue chips before the QE3-driven, low-volume rally signaled a shaky performance by the stock market this summer,” reports Clark. “All these blue chips may accelerate again if the earnings growth and visibility come through for the third quarter, but frankly, this isn’t very likely.”
In the article “This Is the Correction We Didn’t Get After QE3 Became Real,” Clark notes that the saving grace for the current state of the stock market is its valuation, and among blue chips, he believes most are fairly priced given their earnings.
Where the market goes from here depends on visibility for the fourth quarter, says Clark.
The Profit Confidential expert also notes that the sovereign debt crisis in Europe and the fiscal cliff in the U.S. are significant risks going forward, but the key for the stock market today, he believes, is earnings growth. If earnings growth proves to be in decline, then share prices will follow, reasons Clark.
While Clark states that he would not be a buyer at this particular time, he concludes that the U.S. might be at the beginning of a stock market correction as third-quarter earnings season gets underway.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.