Friday, September 29, 2006
Moving Up
The Markets have been moving up over the last few days. Since my last post the SPX and the RUT have both gone up quite considerably. The SPX has added over 20 points.
For us "up" is better than "down" and the reason for this is simple. Walking up stairs takes time. When you get to the top and jump out the window though you hit the ground very quickly!! Stocks are no different.
The SPX gained 2.56 points to finish 1339.15 and the RUT finished virtually unchanged at 732.56. The Dow came close to its all time high but did not manage to make it. Volume was light for the session (this means that not many people are buying shares therefore there is not much momentum in these rises and these gains can be susceptible to bad news).
Gains occurred Thursday despite the fact that Q2 GDP was revised lower. This final revision for the second quarter showed growth of 2.6 percent, down from 2.9 percent. This shows that the economy is slowing, which has eased inflation concerns. However, there remain concerns about a hard landing for the economy, especially given the weakness in the housing sector. One positive for stocks this past month has been the drop in energy prices. On Thursday, crude lost 20-cents a barrel to close at $62.76. On Wednesday, crude prices rose on concerns that declining prices would convince OPEC to cut production quotas. At the same time, oils inability to hold below $60 created a lot of short covering.
Main news for today will come from the personal income report, which includes the core PCE figure. This figure is the key inflation measure for the Fed. If this is higher than expected expect the markets to fall sharply, which provided the fall is not too steep, would be good for our positions at the end of this second week in the cycle.
Until next time.
For us "up" is better than "down" and the reason for this is simple. Walking up stairs takes time. When you get to the top and jump out the window though you hit the ground very quickly!! Stocks are no different.
The SPX gained 2.56 points to finish 1339.15 and the RUT finished virtually unchanged at 732.56. The Dow came close to its all time high but did not manage to make it. Volume was light for the session (this means that not many people are buying shares therefore there is not much momentum in these rises and these gains can be susceptible to bad news).
Gains occurred Thursday despite the fact that Q2 GDP was revised lower. This final revision for the second quarter showed growth of 2.6 percent, down from 2.9 percent. This shows that the economy is slowing, which has eased inflation concerns. However, there remain concerns about a hard landing for the economy, especially given the weakness in the housing sector. One positive for stocks this past month has been the drop in energy prices. On Thursday, crude lost 20-cents a barrel to close at $62.76. On Wednesday, crude prices rose on concerns that declining prices would convince OPEC to cut production quotas. At the same time, oils inability to hold below $60 created a lot of short covering.
Main news for today will come from the personal income report, which includes the core PCE figure. This figure is the key inflation measure for the Fed. If this is higher than expected expect the markets to fall sharply, which provided the fall is not too steep, would be good for our positions at the end of this second week in the cycle.
Until next time.
# posted by Paul @ 3:50 AM 
