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I am very intriqued by our top 2 choices for the "Pooring of America" trend - Walmart (WMT) and McDonalds (MCD) - what exactly are the charts above telling us? Feel free to chime in with comments. If we are to enter a long drawn out recession, which I have believed - these seem to be screaming buys here. The only question is credit - how does a lack of credit potentially hurt both. They are not expanding a ton in the U.S. at least - perhaps with Walmart its financing of inventory but I cannot wrap my mind around this behavior.
It is however another part of the bottoming process when the places people are hanging out as safety get destroyed - we saw that at market bottoms in January and March 2008 as well. In fact McDonalds is all the way back to January 08 lows.
My possibilities are- Mutual fund redemptions - these are huge holdings of hundreds upon hundreds of the largest type of "large cap" mutual funds - as retail investors panic and redeem from mutual funds - the funds have to sell to raise cash
- Some sort of credit issue
- 'End of Days' in the US economy as people cannot even afford the bottom of the proverbial food chain (worst case)
- Their weakness is a precursor for a roaring economy in 6-9 months (i.e. as everything recovers people will begin to shop back upscale) *cough* doubtful but I'm putting it out there (best case aka the Dennis Kneale aka perma bull reason)
No position but thinking this might be "the" opportunity for these two
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