The One Reason Behind the Powerful October Rally

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		Wednesday, November 9, 2011 The One Reason Behind the Powerful October Rally    by Rick Pendergraft Being in the investment business, I am often asked why the market is going up or down. These days, my answer is usually something along the lines of specific news from Europe or an economic report that came in better or worse than expected. In reality, the ONLY reason a stock or the market goes up is that there are more buyers than sellers and the reason it goes down is because there are more sellers than buyers. The reason behind the move may be based on some sort of news, but the news itself leads to buying or selling. We sometimes forget this very basic premise and it doesn't matter whether you are seasoned investor or a novice investor. We get so caught up watching certain indicators and certain news, but the fact remains that the market goes up when there are more buyers than sellers. What happened in October was that there were far more buyers than sellers. Was the news so great that the S&P 500 should have turned in its eighth best monthly percentage gain over the last 60 years? Probably not. Were the technical indicators so bullish that we should have seen the S&P 500 rise by 10.8 percent? Not really. Were the earnings reports so impressive that we should have had the second biggest monthly point move in the history of the S&P 500? I don't think so. So why did we see the big rally? Because investor sentiment was more bearish than it should have been leading into the beginning of October. Sentiment tells us when the probability of having more buyers than sellers is highest. It also can create strong rallies on mediocre news. Look at it this way: If everyone owns a stock and everyone is bullish on a stock, who's left to buy the stock? If everyone that wants out of the market has already gotten out during a correction, the only people left are buyers. When the sentiment towards the market reaches a bullish or bearish extreme, the probability is now... Click here to read more >>   VISIT OUR SPONSOR $14 Trillion in Debt and a 9% Unemployment Rate 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. Click here to find out how to get your complimentary copy of the U.S. Debt Protection Fund special report... Four Gold Stocks on the Rise by Chris Preston With the price of gold up nearly 30 percent for the year and climbing back toward the $1,800 level, it's hard to imagine any stock outpacing the gains gold has made in 2011. But that's exactly what renowned hedge-fund manager David Einhorn is forecasting. Einhorn predicts that gold mining companies will outperform the underlying commodity in the coming months. That could translate into a big bump for gold stocks. "With gold at today's price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further," Einhorn said. "Since we believe gold will continue to rise, we expect gold stocks to do even better." If gold stocks do in fact catch up to, and eventually outpace, the rising rate of gold bullion, it will be helpful to know which stocks stand to make the biggest gains. With the price of gold averaging well above $1600 per ounce over the last year, many gold mining companies are turning a profit. But which of them are best poised to turn those profits into stock market returns? Here are four gold stocks with promising future "prospects": Click here to read more >>
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