Will Santa Provide a Rally or Will Grinch Steal the Day?
The broad markets closed out last week near the November high. Do we break higher and take the next leg in the current uptrend or pullback and test support? Investors looking for the Santa rally are hoping for the break higher and Grinch thinks the market is overbought and due for a pullback or correction. We could argue both sides, but for now the Santa rally has the upper hand.
The market made the move through resistance at the April highs. Now what? The headlines have been full of opinions relative to the economy, the dollar, metals and geopolitical issues. One thing is certain about money, there is never a shortage of opinions. The challenge comes in filtering through the noise and looking for the opportunities.
Market is Moving Cautiously, Investors Should Too!
The broad market came through two major news events intact yesterday. The elections ran according to the script laid out and then miraculously the Fed played according to script as well. Following the afternoon announcement the markets acted as if they really didn’t know how to respond. The traders were set to respond if it was too much or too little stimulus, not just right.
The price of gold has moved back to $1360 gaining nearly $40 the last two trading days. The intraday high was $1388 just two weeks ago. The pullback to $1320 invited those who think gold prices are inflated to pontificate about the metal correcting. There have been some analysts who believe gold will drop to $1000 before year end.
Indecision is a Decision! Investor Confidence Plays a Big Role in Market Trends
Indecision is a decision! Those words still ring in my ears from my hitting coach in baseball. My kids hear it from me every day. Those words are what worry me currently about the market activity. We have one day where the buyers step in and take the indexes higher and the next day the sellers take it lower. The end result of the week thus far is nothing!