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Markets are ready to bounce back!

Now that DOW has finally touched 12500, I am changing my outlook for stack markets. It is ready to bounce back and DOW would close about 13000 by year end. Despite all nervousness around "fiscal cliff" and recession due to fiscal cliff, US politicians are not stupid to push country into recession. President Obama has upper hand in negotiations due to strong showing in re-election and finally republicans leaders have started showing some sense in their public talks (otherwise they know that they are going to lose control of house in 2014). So all indications are that there would be some kind of "grand bargain" between Thanksgiving and Christmas. Markets would start anticipating this starting from next week and start rising slowly but surely. This is why I am predicting DOW to close above 13000 and S&P near 1400. So what sectors I am bullish on? I still prefer REIT, Energy and Health-case sector. in REIT sector, recently I discovered new leveraged ETF - MORL (between $20-22). If you believe interest rates are going to be low for quite some time and refi rates have hit bottom, this could be a good ETF to get exposure to REIT with outstanding yield (over 20%). Be careful since this is leveraged EFT so risks are much higher.
India's one of the most prominent (and controversial) leader Bal Thackeray died this week. He was leader who would speak his mind no matter what. This is what I liked about him and connected. He single handedly built Shivsena and was instrumental in bringing right-wing parties (BJP) to power in Maharashtra and center. Maharashtra has lost a strong voice and his will be missed for decades to come.
Mumbai has been at standstill due to his death. Nearly 2 million people came for his last rites. Such an impact he had on Mumbai and Maharashtra! My homage to him.
Wish all of you great Thanksgiving weekend - go out and shop. Economy is depending on you!
/Shyam


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