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December Dilemma

December 6, 2010 – 6:44 pm

This week will provide little in the way of economic data unlike what we
saw last week. Last week was capped with the very poor jobs report on
Friday and despite all the other improving numbers the lack of jobs is and
will continue to be a drag on our economy.

This morning the market is down as it chews on the continuing worry over
Europe and jobs, but what of the rest of the month? There will be a lot of
attention on retail sales with traders and investors looking for any excuse
to push prices higher. If they do not get the numbers they expect stock
price will drift lower.

Since earning season won’t start until next month, which is normally a
catalyst for market movement, we have to reply on statistics to provide
market direction. There is a bias to the upside in December but that has to
be supported by more evidence of stronger economic activity.

For me the fear is that too many people are bullish. I like it much better
when everyone is bearish and the market is rising. As long as there is
outsized fear, money is available to come into the market. Last week, on

the other hand, Goldman Sachs, the smartest people on the Street, turned
bullish on the economy for the first time since the recession stated.

Good Trading
Steve Peasley

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