Tuesday, September 21, 2010

Market comments for Sept.21st.

The big economic news today is Housing starts, Building Permits and The Fed FOMC meeting. The first data released this morning was Housing Starts for August. Expectations were for 540K and the number came in at 598K. For the prior month of July, the number was 546K so we are 10.5% higher than we were expecting. Futures reacted positively to the news.

Building Permits came in at 569K. Expectations were for 550K. The prior month was 559K. So this number along with Housing starts were better than expected and up from the previous month.

Later today the Fed will be meeting and announce whether interest rates will stay the same. The statement they make will be watched carefully.

This market, with a little good news could go to 11,200 on the Dow again. This is another 500 points. But it should not go higher. as it appears a Head-and-Shoulders pattern developed between May and mid-August of last year. So the shorts are going to have still yet a bit longer pain from this rally which will have moved 12% since it was 10,000 in August and 15% since it was 9700 in July. That is what has caused some pain for people like myself who are short right now. This too will pass and those short purchases now will provide the biggest gains when the market does turn. For me it is no time to be weak kneed. As this market rises to 11,200, I will add to my shorts and keep my fingers crossed. But I wouldn't make a move like "All In!" on this expected market rally.

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