Monday, March 10, 2008

What Will Pull Us Out of the Downturn?

First of all I must say that I agree with the statement that this is a downturn or a correction, not a new direction for the market.  Now, with that out of the way, the answer to the topic question is this:  institutional buying coupled with speculator reaction.  Speculators helped drive this market as high as it is now, and they are also the ones that are pushing it lower now trying to lock in some profit (whatever is left at this point).  Now, in the face of a rising bull market for the foreseeable future, this is where institutional buyers start coming in and trying to bottom pick what may be some of the best prices for the rest of 2008.  Once this demand is noticed and the speculators start sniffing it out, then back on the march upward we go.  I'm not saying it's a quick process, but it may be.  All together though, commodities are still the place to be this year.

No comments: