The message we are getting from continued strength in the stock market is the Street is no longer worried about the economy, or Congress averting a default by agreeing to a mini-deal for raising the debt ceiling, or sovereign debt issues abroad.
Its strength suggests those issues are vanishing faster than they arose.
This comes as no surprise to me (“Poof ! Negatives Could Vanish in a Heartbeat… If….”) – Brooksie’s blog - June 15, 2011- DJIA 12,076.
Today: Off and running at the open, with an eye to challenging the May 2 highs. The extent of this 9-day move in the market is remarkable, since it has come on light volume. Resistance to the upside should intensify beyond DJIA 12,725 (S&P 500: 1350). Support is DJIA 12,275 (S&P 500: 1307).
Brooksie’s Daily Stock Market blog: An edge before the open.
Thursday, July 7, 2011 9:24 am EDT
S&P 500: 1339.22
Nasdaq Comp.: 2834.02
Russell 2000: 848.23
What does surprise me is the ease with which the major market indexes rose over the last 9 days.
Two-thirds of the May 2 to June 23 plunge has been recovered with apparent ease.
What could jolt the market ?
Well, the negatives that seemingly vanished could return.
Congress could delay voting to raise the debt ceiling until the last minute, which would be July 22 according to some, August 2 to others. However, a decision could come as early as this week, with both parties meeting at the White House today.
Today’s unemployment claims at minus 14,000 sheds little light on the direction of the economy, however Friday’s nonfarm payroll employment numbers could disappoint, suggesting the possibility that the economic slowdown is worsening.
Sovereign debt issues could resurface again, this time in Portugal and Ireland; but the Street expects that anyway.
As we press into July, Q2 earnings reports will began to dominate headlines.
If a number of key reports reflect the slowing in the economy, these earnings could disappoint, raising doubts about Q3 earnings.
The mood could turn nasty again, but that isn’t what the market is telling us at this juncture.
The writer of Brooksie’s Daily Stock Market blog, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk
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