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Accept the Volatility

July 11, 2011 – 5:02 pm

It should not be any surprise that the stock market continues
to be volatile. The causes are the same as they were last
summer and that is the European debt problems. Added this year
is the U.S. debt ceiling battle in Washington. This morning
it was about Italy with a sharp rise in their borrowing cost as
well as the breakdown in talks about our budget ceiling in Washington.
It also does not help that last Friday’s job report was so
poor.

After hours tonight will be the earnings announcement from Alcoa
which is the traditional start of the flood of new earnings
reports for last quarter. Most expect good news from that
part of the economy.

The EU country problems will fade as they
are dealt with one at a time and so will the budget issue here
in the U.S. once it’s resolved. The market is likely to rally
after those issues are behind us, but before
then there is no escaping volatility. How long these issues
will drag on is going to be an issue. If the earnings reports
and the CEOs’ discussions on future earnings come
in as expected it will be the offsetting positive to the
negativity coming from government debt talks and the EU.

The real issue should be producing jobs, but so far that does
not seem to be anyone’s focus.

Good Trading
Steve Peasley

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