Navellier Growth: your source for market-beating growth stocks

 

The S&P 500 posted its best one-day performance in five years on Tuesday, and the Dow finished the day 416.66 points higher. The reason was, once again, the Fed came to the rescue. It announced plans to pump $200 billion into the markets to add liquidity and help ease some of the strain the credit crisis has been causing. On Wednesday the Dow opened higher before gradually losing steam to end the day down just 46 points.

Earlier in the week, on Monday, the S&P 500 touched an intra-day low of 1272.66, which was just slightly above the January 23 low of 1270.05. What really happened was that the market was retesting its low–it wanted to make sure that the low really was the low before moving higher again. The important thing is that this level held and it didn't make a new low. And that set the bulls charging.

The Fed's added stimulus should help put the market in a very good mood leading up to its March 18 meeting. And it only gets better. I believe that the Fed will do the right thing and continue cutting interest rates next Tuesday–a 0.75% cut is now very possible. I also expect another rate cut after the Fed's meeting in April.

Once the market has a chance to digest these rate cuts, I expect that growth stocks, especially our fundamentally superior growth stocks, will pick up some steam.

I'm very pleased that even in this turbulent market environment, our stocks continue to post strong sales and earnings growth, and are characterized by extremely low price-to-earnings ratios. The fact that our stocks are concentrated in hot sectors, such as aerospace, agriculture, oil service and other hot spots, has helped us weather the market's winter storms, but the best news is, we're finally starting to see the light.

Due to the market's successful retest, the Fed stimulus and the upcoming rate cut on March 18, now is an excellent time for Conservative investors to jump back into the market. I outlined my specific buying instructions in our March Blue Chip Growth issue. If you haven't had a chance to read it, please do so right away. Even if you had moved to cash reserves, now's the prime time for you to get fully invested–you should start dollar cost averaging between now and early May. These bargain prices and rock-bottom valuations won't last too much longer. The market's poised to take off, and I want to be sure you're positioned for the profits!