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.

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Companies

Symbol Name Price Change % Volume
INN Summit Hotel Properties Inc. 13.83 0.16 1.17 345,149

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