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A Calm Week

December 30, 2009 – 2:27 pm

We are faced with another shortened week for the stock market and with little economic news being released the market will likely do very little. The trading should be light. So absent some big merger deal or a surprise announcement of monumental consequences regarding the economy nothing much will be happening until the first of the year.

There has been light trade volume for several months as the market slowly and painfully edged up. Normally, light volume means a change in direction and in this case it should have been down. But that has not happened. Of course that leads to the question as to why? I believe investors and traders were exhausted. There was a group sigh of relief as the market recovered from one of its worst performances in history for 2008 and the start of 2009. We all witnessed a sharp spike up from the March 9th lows. Traders, both individuals and professionals, locked in profits, content to sit on their hard earned returns and afraid of the year end. They just decided to sit it out for a while thus volume shrunk.

Will they return in the new year? They have to because they don’t earn money sitting on it. A better question is will the bears or bulls be in charge when they return?

Good Trading
Steve Peasley

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