- Image via Wikipedia
When I awoke this morning I was greeted at my screens by this headline. Everything seems rosy for the economy, right?
One of the first rules I learned when I first began trading and investing is that if a stock was to go down 50% from where I bought it, in order to break even, it would have to go up 100% in order to breakeven on the stock. This rule is integral to rules of position sizing and setting stops. So reading more of the article I landed upon a little more detail.
Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst year for GDP since the 10.9% drop in 1946, when the United States geared back to a peacetime economy…
And
The figures are subject to large revisions in coming months…
And
In the fourth quarter of 2009, about two-thirds of the growth came via the swing in inventories. Excluding the change in inventories, final sales increased at a 2.2% annual rate, a signal that the economy remained weak despite stellar topline numbers…
There is much more in the report and we’ll be bombarded with the analysis all day today. I show resistance at $44.00 on the Q’s and the early futures seem to show that. There are many traders that aren’t going to be placing bets to the upside just yet. I’m one of them. Even if you believe that these figures I’d not bet the farm just yet.
U.S. GDP surges 5.7% on inventory slowdown Economic Report – MarketWatch
