· A September rally taking the major indices into positive territory for the year
· Strong leadership: CRM, FFIV, AKAM, VMW
· Gold hits alltime highs, Silver hits new 30 year highs
· The US Dollar continuing its fall and growing concern over a US government credit downgrade… possibly even bankruptcy
· Oracle is this month’s stock to watch
What a month! After getting faked out multiple times in May and June, the market finally decided to get its act together and act more like its usual self. The September rally has taken the major indices into positive territory for the year, and has produced several leaders discussed in last month’s report. These are the cloud computing stocks Salesforce.com (CRM), F5 Networks (FFIV), Akamai Technologies (AKAM), and VMware Inc. (VMW), online video renter Netflix (NFLX), and precious metals GLD (SPDR gold trust ETF), Silver Trust ETF (SLV). At the point, the market, along with many leading stocks, have every right to rest, pullback, and possibly make its next move higher.
Since 1945, the US dollar served as the world’s reserve currency,which has given the greenback worldwide clout. But with a GDP of about $14 trillion and growing debt, this is likely to change. While the government reported US debt at $13.370 trillion, this did not include off-balance sheet items. Factoring this in, the Peter G Peterson Foundation and Dallas Federal Reserve came up with more likely estimates of $63 trillion and $100 trillion, respectively – a level the GDP simply can not support. This not only brings up the real possiblity of a credit downgrade for the US, but also backruptcy.
UDN (PowerShares DB US Dollar Bearish Fund) is the play on the falling dollar. The price gains on above average volume are cues of institutional accumulation as it forms the right side of its cup formation. For now, its best to wait until this formation complete before considering a purchase.
ORCL (Oracle Corp) is trading near a nine-year high and a 26.73 cup buy point after vaulting 8% on Sept. 17 following a strong quarterly report. The software giant is getting a boost from its acquisition of server maker Sun Microsystems, and announcements that it is looking to acquire chip makers. Oracle is following Apple’s model of creating custom hardware and software to create innovative products, and have the potential to become industry leaders in cloud computing and virtualization.
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