Monday May 16, 2011 9:23 am EDT;
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).
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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