It's time to buy everything

Epic upside breakouts are being seen across the risk spectrum -- in stocks, commodities and precious metals.

By Anthony Mirhaydari Jul 3, 2012 1:37PM

Well, this is fun. After months stuck in a sideways amble, the stock market is launching higher. Riskier, smaller stocks are doing better than larger, safer ones. So the Russell 2000 is hotter than the Dow Jones Industrial Average right now. And pharmaceuticals, financials, and foreign stocks are doing better than consumer staples and utilities.

 

But it's not just stocks that are launching higher. Crude oil is in the midst of its best four-day gain since the move out of last October's lows. Copper is having its best run since November. Gold and silver are on the move, too. High-yield bonds are pushing to new highs. For investors, it's time to buy everything that isn't bolted down as the "last gasp rally" I talked about in a recent column gets under way.  

 

 

Everywhere I look, there are breakouts. The Russell 2000 has pushed over downtrend resistance, its 50-day moving average and its upper Bollinger band (a measure of volatility) as if they weren't even there. The S&P 500 has moved over its June high. The DB Commodities Tracking Index Fund (DBC) has moved over its 50-day average for the first time since January.

 

 

Even Apple (AAPL), that perennial market favorite, is on the move again as it jumps its multimonth trading range and initiates a new uptrend.

 

 

Catalysts? Last week's positive result from the eagerly awaited eurozone summit -- where Germany relaxed its opposition to using eurozone bailout funds to recapitalize banks and reduce Spanish and Italian borrowing costs from unsustainable levels -- set off a massive short-covering panic among hedge fund types as extreme short-euro, long-dollar trades were closed. I don't feel sorry for them.

 

Also contributing has been the steady increase in new stimulus measures from global central banks as they react to weakening economic fundamentals.

 

 

A weaker dollar has set off a chain-reaction bounce in dollar-sensitive assets. Crude oil tends to rise when the dollar falls. Emerging-market stocks tend to rise when the dollar falls. Same with gold, copper and other commodities. Just look at the way the iShares Emerging Markets (EEM) is effortlessly jumping its 200-day average for the first time since January.

 

How long will it last? I give it a few months before structural problems resurface, such as the looming fiscal cliff of tax hikes and spending cuts worth about 5% of GDP set to hit in early 2013.

 

How to play it? I've been telling my newsletter subscribers about, and focusing the Edge Letter Sample Portfolio on, contra-dollar assets like foreign stocks and commodities. But other areas of the market are now joining in, with financials a standout area of new strength. Synovus Financial (SNV) is already up more than 10% since I added it less than a week ago. The Direxion 3x Emerging Markets Bull (EDC) is up nearly 20% since I added it on June 6.

 

As of Tuesday, I'm adding Apple to my holdings.

 

Disclosure: Anthony has recommended DBC and SNV to his newsletter subscribers.

 


Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at anthony@edgeletter.c​om and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.

 

VIDEO ON MSN MONEY

52Comments
Jul 3, 2012 1:57PM
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Charts are nothing more than historical data points. They have no more ability to predict the future than Tarot cards, Magic 8 Balls, or chicken entrails.
Jul 3, 2012 4:20PM
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Market analysts say buy, blackjack dealers say place your bets, and prostitutes say I love you baby.

 

They can’t help it, it’s just who they are and what they do.
Jul 3, 2012 5:12PM
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Wrong, Wrong, Wrong!! The Euro conference resolution that kicked off this ralley stated Germany MAY buy Spanish and Greek treasuies came with conditions of fiscal restraint. This means austerity measures that these countries people rejected would have to remain in place for Germany to come to the rescue. Those countries just like the old USA are not willing to take the measures necissary to fix their budget problems. So much for these cheer leaders. I'm not saying this may not last a little bit longer, but to uncork the bubbly over deceptive press releases being used as a market mover by the big money men is crazy.
Jul 3, 2012 2:13PM
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uh huh...right...take this guy's advice and you may as well jump off the fiscal cliff too...he should get a trophy for top flip flopper...as bob dylan wrote, the answer is blowin in the wind...

Jul 3, 2012 4:21PM
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what a tool...buy now?? this guy should be tarred and feathered. This is exact type of articles that contributes to the layperson losing his shirt while this tool shorts the stock and laughs all the way to the bank...
Jul 3, 2012 2:13PM
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Four or five days does not make a rally--unless you're talking about a sucker rally. Four or five days make a good "dead cat bounce", when ends once the short-sellers have covered and the suckers have followed behind them. Then the tap runs dry and the rally staggers.

 

I'm not saying I KNOW this will happen, but it is the most likely scenario. Watch the daily up-volumes and down-volumes on each up and down day--that will tell the story. If it continues rising but on lower and lower volumes, watch out below.

Jul 3, 2012 2:29PM
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Believe me.  This is all a con!  We are already at the 'cliff' and these pundits know it.  Have said this many times and will reiterate it again....the markets are 'controlled' and the SEC does nothing about it. There are no 'investors' as middle class as there is hardly a middle class, working. "They" are 'churning' 401K's and pension plans and have been for a couple years'.   The 'markets' are fallacious and this is not done yet!  This is entitlement and socialism and worse.  I will say it again, this is going to get very very nasty!  Have a nice Independence Day, all. 
Jul 3, 2012 4:48PM
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Anthony must have got his Provac prescription refilled.
Jul 3, 2012 6:35PM
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Lets have some FUN it is time to buy everything ! Great one line from FRAUD STREET MORE BULL  "S"   TO SCREW OVER THE PEOPLE !   TAKE YOUR MONEY AND RUN !!
Jul 3, 2012 3:46PM
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Today actually plays against what the Big boys are looking for.  A little uptick is not what they want.  They need some real gloom and doom so they can make the big play when the FED does another QE.  Trading on news like car sales rising is what the retail guy does.  These days, Institutions trade on news they create.  Look for a big selloff to cash in on last week's gains.  Then when it looks bad enough the FED will cave and we'll get another ridiculous runnup funded by newly printed money.  That's where the real money will be made.  Problem is, unless you have perfect timing, you will end up with no gain. 

 

Maybe make up a story about Iran blocking the straits of Hormuz with one of their ski boats.  That's a scary thought!     

Jul 3, 2012 7:51PM
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2 days in a row he's still bullish.  That's a record.
Jul 3, 2012 3:20PM
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I got out of the market at 12.3k  to 12.8k DOW the first time...months ago (almost a year), think about all the interest I've gained on the sidelines in the money market...vesus the ride from 13k back down to 12k...over and over and over again. Nothing changes...it's a fool's game. I love precious metals and commodities...i can trust those. QE and operation twist prop up "buying" on the stock market is not for me.
Jul 4, 2012 2:27PM
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1. The sudden up trend is parabolic nearly all parabolic up trends are followed by severe downturns

 

2. . Europe hasn't fixed anything. Their recent dog and pony show was just that, and it will soon be seen as such.

 

3. There may be a black swan rising from the Straights of Hormuz.

 

4. Global trends are still slowing and are just now starting to show up in the U.S. data, lower earnings and many warnings are ahead.

 

The market is making a head fake here...careful out there.

Jul 3, 2012 4:47PM
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Imagine if we find out Jamie Dimon's JPM was also playing in the Barclay's Libor scandal to hide true losses and falsify rates for profits.

Jamie is hoping the black cloud passes by him quickly - that JMP will be in better shape by the time the truth is exposed.

Jul 3, 2012 3:33PM
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ROFLMAO!  Excuse me, but the time to buy was March Of 2009................now is the time to sell, because the real bottom of this market is much, much, much lower than the 2009 recession lows.
Jul 3, 2012 4:38PM
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Did someone pop the bubbly a bit early?

The sobering truth from Christine Lagarde's IMF update today is not this optimistic. I would be much more cautious. Also, if the whole truth about Greece's predicament actually makes it into US news this week, Greece's economy is showing major contraction with a long term unemployment rate of over 22%.

I think precious metals will bump up and down for the next 6 months, however, I doubt they will drop dramatically and are probably the safest bet.

Jul 4, 2012 11:17PM
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To quote from John Maynard Keynes: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” This lesson was subsequently forgotten by Keynes’s own followers, but was relearned during the stagflation of the 1970s.
Jul 3, 2012 11:11PM
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The Dow has crawled back to almost 13,000 and Anthony is telling us to buy.

 

I call that fracking.

 

Yes, huge amounts of European money is pouring into U.S. markets and securities, but keep your powder dry.  The Dow will go up with all that European money running for cover.  It is not a sucker's rally, but walk softly and carry a big stick.

 

Wait until after the November elections and after all the dust has settled.  Then buy real estate in Alabama.  You know, where Airbus wants to set up a non-union shop.

 

Plans within plans within plans within plans.

 

What the hell happened to part two of the movie Atlas Shrugged?  WE'RE WAITING!!!!

 

Good post carl ****.  I look forward to buying you a cocktail someday soon.

 

 

Jul 3, 2012 2:00PM
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PUMP IT UP MSN.  It is now offically close enough to the election to try and make everything look great for the incumbent.  Everyone pump your money into the stock market just because this **** is part of the obama reach arounds.
Jul 3, 2012 2:42PM
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Yep, this is all a conspiracy to get Obama re-elected.  Especially since Wall street loves him.

That commie, Muslim, Baptist, Catholic, socialist, white, black, Latino, North Korean, Iranian, Martian, Plutonian, patriot, traitor, killer, pacifist, populist, poopy pants man, woman, dink, homeless, White House resident.
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