Economic Outlook Part II

In our August 17 blog we boldly predicted the economy would grow by at least 3% in the third quarter. Thursday's report showed growth at 3.5%. We also said when that happens stocks would be far higher. Back then the Dow was at 9135. Now it stands at 9700. I expect slower growth in the fourth quarter, but still growth nontheless.

Those who invest in the market based on today's news will once again be on the wrong side. Notice the Dow's crossing of 10,000 was not a new buy signal. It was a time of profit taking. The positive GDP number was not a new buy signal. It will likely be a time to reduce market exposure. We moved client portfolios away from fully invested on October 15.

Video Series

Here are three short videos on the market and our managed account programs:

http://www.etfportfolios.net/videos9/index.html

David Vomund

Bullish S&P 500 Chart

Browsing financial websites it seemed nearly everyone fell into two camps …. the market would test the lows or the market would fall 5 to 10 percent. It was hard to find anyone that thought the market would hit new highs. The public’s skepticism and negative sentiment are hallmarks of a new bull market.

With the S&P 500’s move to a new high, an inverse head-and-shoulders bottoming pattern is complete. This pattern developed over a ten month period and is a further sign of bull market. I’m expecting a great fourth quarter.

David Vomund

www.etfportfolios.net