My short on TESCO (TSCO) at £2.17 paid off handsomely as it dropped as low as £2.01, but then we had a bounce back to £2.17. But it’s now time to short again and back down to the £2.00 level. As I have said in my previous posts, at £2.00 the price is going to put up a fight and with patience the £2.00 level will break too and give us the £1.75 level in the absence of any positive news.
I’m still long of Lloyds (LLOY) at £0.87 with a target of £0.94 within 3 to 4 weeks. Lloyds has had two upgrades to buy with targets of £0.93 and £1.04. I won’t say who or what as I generally do not take any notice of broker calls but it is nice to know they are with me on this, not least in terms of the timing.
There has been a magnificent rebound in the markets, especially the US markets. Now, could this be a knee jerk reaction to hitting the S&P support level? Some or most say this is the end of the bull market and the game is over, especially during the last month. I don’t see many bulls out there, and doom and gloom prevails.
To me, it makes no difference how many say this is the end. To me, the glass is more than half full (doing a bit of Tony Montana), the bull market is alive and although stocks are over-valued and there are millions of other reasons for them to fall, I believe we have another leg up to go. I believe we have to make it to DJIA 20,000 and S&P 2,200 before we see a drop in the markets. The DJIA 20,000 being the only key which matters as far as my thinking and analysis goes. They did not bring us thus far without making it to 20,000 and my target, as unbelievable and unimaginable as it is, is 20,000 DJIA by this Christmas. We need to reach a bubble scenario for the bubble to burst and we should have a bubble at 20,000 DJIA. PE ratios of 36/38 are good enough for a bubble.
Some friends who read and follow www.clevergamesuk.com asked me what it would take to change my mind about my DJIA 20,000 and S&P 2,200 targets by Christmas. I repeat the answers I gave: 1. If they raise interest rates in the US, which I do not think will happen till we hit my targets; and 2. If DJIA drops below 17,000.
A drop below 17,000 would be totally conclusive that the bull market has ended… but it ain’t gonna happen before we have made it to 20,000 first, in my humble opinion.
I am very much alone if not the lone voice in this call but I am used to that.
Oil? Not something I trade or follow, but last year I outlined the factors that would, in my opinion, send oil higher, and I repeat them again here: 1. If Vladimir Putin is no longer the president of Russia; and 2. If it goes above $60 and sustains $60+ for more than a few days, in which case my target would be $100 plus.
I believe that the price of oil has been allowed to drop to such low levels so as to break the back of The Russian economy and specifically to get rid of Putin. Now that Putin is not leaving, perhaps they think hey we are losing money here so let’s take the price up again? The indicator of this kind of agenda would be if the oil price stayed above $60 for more than a week or so.
Good luck
All in my humble opinion and no investment advice intended.
Andre Minassian
www.clevergamesuk.com