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Spot Market Bottoms

Written By Brian Hicks

Posted February 6, 2010

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.

It’s the perception that our recession is over that’s got people excited…

And thanks to UPS, that perception is a bit stronger. According to UPS CEO Scott Davis, "It looks like this recession is finally over and believe it or not, that makes 21 that UPS has successfully managed through."

But we’re a bit skeptical as unemployment remains high, as housing struggles, and as foreclosures have only begun to mount.

You see, we’ve only just turned the corner. Mark Zandi, chief economist at Moody’s, agrees that the economy isn’t out of the woods yet: "it appears to have turned the corner," he says, echoing our sentiments.

But he is hopeful for the next few months: "Certainly by spring and summer, we’ll start to see some growth. If history is any guide, when GDP rises… then, a quarter or two down the road, businesses start to add to their payrolls, so the start to hire. So that means, come April, May, June, I’d expect some job growth."

While that’d be nice, remember this much: There are still the three headwinds we mentioned above. And according to Zandi:

[There’s also] a lack of credit, particularly for small business; they need that credit to go and out to hire. The housing crisis continues on. We have lots of foreclosures, and that could drive down housing prices further. Commercial real estate is a problem, and of course, state and local governments all across the country have big budget holes, and if they don’t get help from the federal government, they’ll be cutting jobs and programs. So, it’s good news, but not good enough.

Looks like great minds think alike… We’ve been saying the same thing for months.

Over at the Options Trading Pit, we’ve been eyeing new profit opportunities with this turbulent market as our catalyst.

Here’s a very easy way to find those profit opportunities… like we’re doing in Options Trading Pit:

  • Take a look at the last dip on all of the major indexes. Let’s use the Dow as an example. Take a look at the chart with RSI, MACD, and W%R overlays with Bollinger Bands. Not only do we have a doji cross sitting outside the lower Bollinger Band, but we have an oversold read on MACD and W%R. Also take a look at RSI… It’s sitting right where it was at March 2009 lows, which we bounced off of very hard to the upside.

And shortly after we released that note to Options Trading Pit readers, the market bounced back very nicely.

But if you’re not interested in using TA for gains, here’s where some other opportunities exist:

  • Rare earth metals are still one of the hottest sectors to be in today… and that’s because it’s the "newest great interest" among investors amid heavy, growing demand. Countries risk running out of supplies of certain rare earth metals vital to green technologies amid growing fears that China, which has a monopoly on global production, is about to choke off exports of the much-need metals. But let them… Greenland has $273 billion worth — this is "the" market to be involved with.

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

P.S. In case you missed any of the week’s top-read articles from Wealth Daily and our sister publications, you can catch up on them now:

Green Dividend Stocks: Green Stocks That Pay Investors a Bonus
Green Chip Editor Nick Hodge discusses green dividend stocks, how to identify them, and why they’re a good buy during rough times.

Seven Reasons to Invest in China: I’m with Jim Rogers on This One…
Wealth Daily Editor Chris DeHaemer debunks the experts’ take on a soon-to-pop Chinese real estate bubble, and explains why now is a good time to be bullish on the Middle Kingdom.

"China’s Pantry": The Asian Nation Soon to be Beijing’s Top Growth Partner
Wealth Daily reports as our insiders feed us the 24 resources deals that will make this tiny nation on China’s northwest border the world’s last mega-boom profit opportunity.

Nuclear Energy Stocks: Nuclear Hurdles & Profitable Leaps
Energy & Capital Editor Nick Hodge discusses nuclear energy stocks and why they’re in for an imminent revival.

This Mistake will Cost Us Big: How You Can Take Advantage
After 28 straight months of research, interviews, site visits, number crunching, and answering to critics… Wealth Daily analysts have swallowed the jagged pill that is our mistake regarding the Bakken oil formation: We missed the mark. But our error could mean your benefit… and money in your pocket.

2010’s Investing Pitfalls: Analysts Calling for a Pleasant 2010 Might Be in for a Nasty Surprise…
Wealth Daily Analyst Adam Sharp examines potential market pitfalls of 2010.

FHA Defaults: Many More on the Horizon – The New Subprime
Wealth Daily‘s Steve Christ reports: When this one finally comes tumbling down the taxpayers will be on the hook for every single penny of it. You see, those awful subprime loans never really disappeared.