Summary:
·
Yesterday -
The stock market in the USA went bump, the tires went flat, and traders
that were long panicked. You have all
read what caused the problem, and if you are like me, you only know one thing -
equity prices went down a lot.
·
Plan for today:
o
The market will flat, but after such a big down
day yesterday, the market will likely see a fairly choppy day (unless
geopolitical tensions increase again in Israel, Ukraine, Syria, Libya or Turkey).
o
The early morning trading on the employment
report was "up". Why? I think we can conclude that bad news in the
employment report is translated to good news the Feds won't raise interest
rates soon. That is a temporary blip in
the correction.
o
The strong GDP report for Q2 made for lots of
chatter on the Internet and TV about the Federal Reserve may be falling behind
the curve on growth and inflation. The
lack of earnings growth in the employment report suggests inflation may be
under control; at least give the Federal Reserve the benefit of the doubt.
o
Please remember, the equity markets (DOW,
S&P 500, NASDAQ) are not even beginning to test the 200 day MVA, and while
there is nothing magical about the 200 day MVA, long-term investors' behavior
changes at that point.
o
Today: Flat opening with the market looking for
direction. Look for an prices on the
S&P (and probably NASDAQ) to test yesterday's close several times.
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