Friday, December 14, 2007

CSCO and MSFT after the fact

Notice how CSCO (29.37) and MSFT (35.57) have rallied? On November 28, I had this to say:

Cisco (CSCO 27.49) and Microsoft (MSFT 33.06) were sources of funds for those who needed cash raised and in a hurry. That pressure is now over, and outsized gains can be made in both these numbers, from these levels, right now.

The performance of these numbers are important for two reasons. Just as they were sources of funds when the market was going under liquidation; they are stocks to buy when big money wants to deploy capital. Both stocks have such depth, that they can be used for a source of cash, and a place to hide cash. The momentum stocks rally first, and then traders pick up these. So traders are ready to move into this market on a much bigger scale.

So forget about the PPI and CPI. Go out and buy. The stock market looks forward, the Fed looks backward.

No comments: