Monday, May 23, 2011 9:25 am EDT
S&P 500: 1333.27
Nasdaq Comp.: 2803.32
Russell 2000: 829.09
Still no change in my thinking that the stock market will trade sideways-to down in coming months with occasional sharp rallies as institutions use pullbacks to put sideline cash to work.
Economic news will imply uncertainty, possibly some softening, even rekindle speculation of a double dip recession, those fears will be ill founded.
As repeatedly noted here, the headlines will be on Congressional approval of raising the debt ceiling, normally an uneventful process, but this time around, a highly debatable issue.
I expect the press to salivate over the matter of “approve or not approve” and especially the dire consequences of failing to approve an increase, ergo the government’s default on certain obligations.
Common sense suggests a scary approach to an August deadline, so expect chilling headlines on Page One in July, which can adversely impact the stock market and bond market.
Looks to me like a juicy buying opportunity shaping up, quite possibly as late as Friday, July 29 or during the first 20 minutes of trading on Monday August 1.
In the interim, it stands to be bump ‘n grind, a tricky trading/investing market even for the nimble trader.
Today: Down at the open. We have had “two legs” down since early May, but I doubt the market can hold Friday’s close. Odds favor a drop in the DJIA to the 12,400 (S&P500:1320) level.
I was away last week, but was able to get two blogs off, even though my pre-vacation posts held up well.
I am hoping my conclusions about the direction of the market going forward are more consistently accurate than my “greens-in-regulation” this past week when I golfed at Hilton Head Isle, SC.
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