The stock market looks poised to extend its rally as German and French leaders say they will do whatever it takes to support the Euro-banking system. And it sounds as if there will be a better plan in place than the one German Chancellor Merkel suggested last week, that banks should sell stock to raise money.
That's just a horrible idea. Because if investors know that Euro-banks are struggling, and then one of the banks offers shares for sale, you can bet that will raise suspicions that that bank is in trouble. Then those shares will trade lower, perhaps significantly lower.
Clearly, the Treasury's plan -- that required all large banks to accept loans -- is a much better way to implement recapitalization because it gets the job down and doesn't single out a particular bank.
Also, don't miss the implication of the agreement to recapitalize euro-banks. It means Greek default -- or debt forgiveness -- is coming. A(nother) plan is reportedly coming this month.
Clearly, investors are anticipating a resolution to the Greek debt problem. Stocks can't rally without hope. But is this the time to start buying stocks?
A week ago, I told you that you could buy stocks in anticipation of a rally. That's because stocks were pricing in a global recession, when recession was not likely. The rebound has been as powerful as the move out of the hole in March 2009.
TradeMaster's Jason Cimpl was also all over last week's rally. In fact, he went all-in on Tuesday morning. Jason's TradeMaster subscribers booked a 13% and 9% winner from last week already. But Jason still holds a large book of long positions from Tuesday morning, each with double digit return.
It doesn't look good for the U.S. right now. We have a lot of work to do to get this country back on track. It could take 5 years...10 years...maybe more...
And I don't know many investors who can wait 10 years for their U.S. investments to get back on the winning path. I know I can't. And that's why I've created the U.S. Debt Protection Fund.
I'm Ian Wyatt of Wyatt Investment Research. My simple and easy to implement U.S. Debt Protection Fund will quickly and effectively protect your wealth as the dollar loses more and more of its value.
Independent Investment Services Wyatt Investment Research provides investment research that is independent of the back door deals and machinations of Wall Street.
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