Banks a Ticking Time Bomb in the Markets

Tuesday, August 25, 2009 9:57 AM

By: Victor Riesco

This year the market has been tough to all types of investors. We have witnessed violent price swings to the upside and downside, conflicting economic data, and high uncertainty about the future.

To profit from this market, investors needed to quickly adjust their views and strategies, shorting rallies during the first months of the year and buying dips since March onwards. Perma-bears and perma-bulls probably suffered losses during this time period.

By the end of July, the broad and worldwide advance in equities and commodities confirmed that we are in fact in a bull market and there is a strong upward trend. Every dip has been bought and the market keeps making new highs.

Strong technicals suggest investors should remain long and have some exposure in the market.

On the other hand, fundamentals have not improved and, in my view, have gotten worse.

One of the factors that concern me the most is that fiscal deficits have grown to historic highs in order to save failed companies and ‚Äústimulate‚Ä