Investors Beware: Bumpy Stock Market Ahead!

George Brooks |

George Brooks Stock MarketBrooksie’s Daily Stock Market blog: An edge before the market opens.

Monday May 16, 2011 9:23 am EDT;

DJIA: 12,595.12
S&P 500: 1337.77
Nasdaq Comp: 2828.47
Russell 2000: 847.53

No change in my belief that the stock market has entered a period of volatility with limited sustained upside other than some trading rallies best suited for the agile trader.

The major uncertainty inhibiting a meaningful rise in stock prices is Congressional approval of an increase in the nation’s debt ceiling. This kind of approval has been a slam dunk over the years with the approval of some 66 increases over the last 50 years.

This time around is different as the Republicans and Democrats are hashing out a plan for addressing the nation’s national debt as a condition to approval. Failure to approve an increase by Aug 2 would
Result in default on a lot of government obligations.

While the press may hype this issue for the obvious reason, I believe the limit will be given.

Meanwhile, the stock market will respond, mostly negatively.

Inability of the DJIA to hold above 12,550, would result in a test of the next support level of DJIA 12,370 (S&P 500: 1320).

George Brooks
sensiblesleuth@gmail.com

NOTE: I am away for a week and not in as close touch with the market as I usually am. I will post on occasion.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
INN Summit Hotel Properties Inc. 14.96 0.00 0.00 0

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