Wednesday, February 17, 2010

Market update.

It has been a while since I posted last. But the reason is there hasn't been much commentary to make on the market. As you can see from the chart above, the Dow did rise the last 2 days but on lower volume than there was 3 days ago. Many are awaiting resolution to the issue of Greece debt before commiting new money to the market. Besides the top of this market is just below 11,000 and no one is going to risk buying unless a correction of 10 % has been made. That is why volume is dropping instead of rising the past 2 days.

Another point to be made is the fact that the 200 Day Moving Average is rising and it won't be long before we go below that level. I expect it in the 10% major correction I expect before the end of March. That will be the end of the 3rd quarter and many will speculate about how bad things still are. Then comes the first few weeks in April where earnings are announced for the 1st quarter.

The Consumer has not increased spending, nor will they until the unemployment picture looks better. That, unfortunately, is a long way off. New Home Construction was up in January and the market moved up accordingly, but that isn't a good thing as there are many houses still in foreclosure or short sales and the last thing the housing market needs right now is more houses on the market. We need a little scarcity of available homes for sale right now, not building new ones to add to the market.

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