Up, up, but not away!
by Peter Switzer
Another positive day on the stock market is likely with Wall Street registering another positive day, and so it’s up, up but not away yet. There are still a few hoops for Europe and the US to jump through before we get a sustained market take-off but so far, so good this week.
Apart from watching Europeans daily — they’re a work-in-progress mob — the Yanks have an important jobs number coming out tonight, which could have real market implications.
Last night the ECB didn’t cut rates, which I think was dumb, but it did promise to help liquidity for banks in the Eurozone and that’s seen as a smart move. Meanwhile, the US received a better-than-expected jobless claims report and while these numbers can be very changeable, at this time any good news should be gratefully received when we’re trying to turn around investor sentiment.
On the index front, the Dow ended up 183.38 points, or 1.68 per cent, to 11,123.33 while the S&P 500 put on 20.94 points, or 1.83 per cent, to 1164.97. The past two days have taken the S&P 500 away from dangerous technical levels and that’s another plus we should be happy about.
Among the better-than-expected news, the vocal support offered by EU officials for their banks has been a missing link that's been weakening the chain of command of the European leaders who hopefully lead the Eurozone out of financial collapse and eventually away from recession, which looks likely because of past ineptitude.
The next two months
The Europeans have appeared a lot more professional since the Belgian-French financial group Dexia has looked on the brink of collapse or in need of a serious rescue this week.
Economics wise, the jobless claims were only moderately under expectations but at least they didn’t spike. Frankly, what I want to see is this jobs report and then the next two months’ readings as well — these will be critical to my expected rally over November-December.
That’s when we will get the market take-off which is overdue following six months of over-selling!
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Published on: Friday, October 07, 2011
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