November: Review and Moving Forward

Stocks closed down yet again today as the continuing European crisis strikes fear in the heart of investors and a delayed vote on the possible extension of the Bush Era Tax Cuts.  Dow was down as much as 110 points today but closed ended the session down 46.  Nasdaq down 27 and S&P down 7. 

Stocks closed out November in a loss, the first monthly loss since August.  November saw big events that had mostly negative twists to them; QE2 and Ireland bailout (second Euro nation to receive a bailout this year).  QE2 has received many negative views and opinions.  Most of which are essentially worries of a "dollar crash" or very high inflation. 

EUROPEAN CRISIS UPDATE:

As for Ireland, many remain skeptical on Ireland's plan to get its economy stable again.  Another worry is that two European nations have received bailouts this year and there may be more to follow.

Standard and Poor are reviewing Portugal's financial documents and hinting at a downgrade.  Portugal seems to be heading closer and closer into the dark everyday with its huge debt position and the bond market issues. 

As for Spain, leaders have vowed to stabilize the economy and reduce the debt.  "Talk is cheap" is the main response from traders and other Euro leaders.  Spain needs to start acting now on its solution to keep down fears of default and a possible bailout. 

Prediction:  I predict that Portugal will end up being downgraded by S&P and will eventually need a bailout from the EU, marking the 3rd bailout.  I believe Spain will need some sort of EU assistance to help rebalance the debt but I don't believe they will need a bailout because they do seem to be aware of the situation and its severity.  Greece and Ireland will need more EU assistance, especially Greece.

In addition for the trades that were suggested my article "Playing the European Crisis", I would like to add gold.  Gold surged up over $21 today, but eventually closed lower, on Euro debt woes.  I believe gold is a great addition to the list of trades that were suggested in earlier article.  Possible ETFs are the SPDR Gold Trust (GLD) and iShares Gold Trust (IAU). 

Look for the December Stock of the Month, coming soon!

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Disclosure: no positions

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