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Direction Interrupted

May 10, 2010 – 4:56 pm

The rebound this morning is again all about debt. This time it is good news from Europe. With concern over the debt of other countries in the EU, other than Greece, the European finance ministers agreed on a new loan program that is about $1 trillion dollars, if needed. This is an effort to get ahead of the problems that the other countries in the Euro zone might be facing and how to deal with them. It does not make the debt go away but it will calm the waters of the world stock markets.

On the economic side in the U.S. we will not have much in the way of statistics until Friday so do not expect market moving data until then. The last of the earnings season numbers will be reported this week but even those will be yesterday’s news.

That leaves the traders to decide what direction they want to take the market. Stay with the market because as we have seen last week and today no one can predict the direction of the market and the traders in the short term are fickle. Long term the economy is getting better and it is becoming more certain as time passes. That is good for stock prices as that is good for corporate earnings.

Also, long term the U.S. has its own debt issues so at some point our attention will have to shift to what our own government will do about it.

Good Trading
Steve Peasley

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