If you have been reading any of the news headlines, you’ll notice in big letters ‘AIG GOING BANKRUPT, GOVERNMENT SUMMONED TO HELP’. We had a huge 500 point drop on monday and then many fluctuations the rest of the week. Thursday and Friday showed a huge rally that pretty much covered the whole drop from the week. The government’s bailout scheme worked and brought the market back up. Good for us who own stocks, bad for everyone else because we will all be part of the bailout helping the government pay out those taxes.
Tomorrow, we will either see another drop in stocks or see the stocks rise as part of the usual election rally. I see a good chance of it dropping as short-selling is being banned for the rest of the year, which will artifically make the market rise temporarily, but finally drop again as people will just start selling the stocks. Again, with last weeks’ news headlines like the Wall Street Journal’s big letter ‘CRISIS ON WALL STREET’, the blood might already be on the streets and its time for the recovery. I do believe we will finally see a rise in the stocks before the year’s end. If not the election rally, there will be the usual year-end rally. I’m looking at november to be key. But if you are in the stocks like me and don’t need the money right away, just hold on those stocks and let’s ride with the market.