This morning, on my usual trek through the news, I found little to consider for the column today. Oh, it’s not that there is no news; it is just more of the same, generally. Today, the market is up because the news is the same good news from Europe that we have seen consistently over the past two years, the kind of news that drives the market up after the bad news has driven the market down. The only difference today is the news is fresh and the names and places have changed.
Realistically, the European struggle will go on for a while, and we will see more of the market ups and market downs. Keep in mind, though, the road to ultimate resolution in Europe (and the U.S.) is long and politically bumpy. As well, though, the important thing to remember is every positive step is one that moves the process closer to completion.
I did note one interesting thing when reading this morning, and it goes right to the heart of my useless complaining about the breathless media. I came across the information below, and I might have missed it had I not already had coffee.
The University of Michigan’s consumer sentiment index rose to 64.2 from 60.9 in October, a better reading than the 61 economists expected.
Now, what is interesting about the above is that had that number been to the downside, you can bet it would have been in the headlines, screaming something to the tune of, Consumer Confidence Plunges in October. Personally, I think the surveys are bunk, but they can help as well as hurt, if the media would play them up when they are good. Just saying …
No matter, I am still finishing my week with reason number five for seeing the market in a positive frame.
This last reason is less specific than the other four, however, it is as important as any one of them – because of all the uncertainty, fear generation, and volatility over the past three years, professional money managers, investment institutions, businesses, and retail investors have held back trillions of dollars from the equities market. The large stash of cash on the sidelines will find its way back to the equities market when confidence returns, and, at that time, everyone will start chasing the uptrend. The media will hype the market run up because after so much bad news, the good news will sell equally as well, for a time, anyway.
So, it appears the week will end close to where it started. I count this as a plus, given the crazy, political shenanigans in Europe. The good news is that the trading-range environment, the one we have had for a while now, is still intact, only the range is now likely to be 11,800 to 12, 200 on the Dow, just a bit higher than where the market was trading in late September and early October. If this holds, and the news improves, look for this range to climb even higher.
Trade in the day – Invest in your life …
