Market Beating Foresight: Solid Start To The New Year

The first week of January trading got off to a solid start with the broad market rising 2.7%. The increase was a very good sign as trading volumes returned to normal following the holiday. Economic news was mixed, but the market found a way to rise anyway. The biggest market drag was the slip in payrolls which saw an unexpected decline. That news came on Friday, but the market was able to shrug it off and end the week with strong gains. Unemployment continues to be very sticky and significant improvements in those numbers do not appear near on the horizon. However, we do see improvements coming in quarterly earnings reports. Companies will begin announcing results for the most recent quarter end beginning next week. We believe the majority of reports will show improvement due to company cost reduction efforts, as well as opportunistic year over year comparisons. Bottom line earnings growth should be improve, although top line revenue growth may remain elusive for many companies. All in all, we believe the next quarterly earnings cycle will continue to support current market levels and should even help propel stock prices modestly higher. Many pundits believe that performance over the month of January is a very good barometer for how the year will finish. Meaning, if we can show a monthly gain in January, the market will end the year in positive territory. January performance certainly got off to a good start with the solid performance this week!

Momentum And Value Screen: Hot Stocks To Buy

What Stock Tips do we have? We have kept VSE Corp (VSEC, Business Services) and Continucare (CNU, Healthcare Facilities) on our stock watch list through the first week of the New Year. VSE Corp continues to show strong momentum rising almost 6% over the first week of January. The company is scheduled to release their most recent quarterly earnings report on January 18. That report may provide the stock a jolt one way or the other as the price has been stuck in a fairly narrow range since November. We are not going to consider buying until release of that earnings report. Continucare lost a little ground this week as the stock price continues to consolidate in a pattern established over the past three weeks. We still think this is an excellent time to buy stock as the company track record with delivering earnings growth has been very good. The stock price has had a strong run over the past year, so the recent consolidation period suggests there is price support for the stock at recent levels. We may consider buying this one next week. As we mentioned last week, we think 2010 will be a positive year, but the stock market will likely remain bumpy particularly over the first six months. All in all, we think there will be plenty of opportunity to make money in stocks and options in the New Year, particularly those investors that show patience and wait for attractive entry points!

Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com