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Distractions and Disturbances

December 9, 2009 – 11:10 am

The market is moving based on world economic news and politics as new economic numbers are few and far between this week. There appears to be an unease about foreign debt as the Dubai problem drags and as it focuses attention on other countries. Spain’s credit worthiness is now under suspicion with its relatively high debt being touted as a concern. Governments around the world have incurred large debt to stabilize their economies through stabilizing their banks but that debt comes due at some point.

The focus will change as everyone waits for more data on the U.S. economy. We are still the engine of the world and though emerging┬ámarket economies are stronger than ours the shear size of our economy makes it the most important. Therefore, its the economy’s future direction that is on everyone’s mind and statistics on its direction will move the market until earnings season starts again next month.

Also, affecting the market is year end buying and selling buy mutual funds and individuals. This includes tax loss selling,
portfolio messaging by funds to show only strong stocks abandoning the losers, and finally, buying caused by
retirement funding from state and private pension funds, IRAs and 401K type accounts. The funding will come in later
in the month and the actual buying of equities will extend into January.

There is a lot on everyone’s mind including the holiday season and its distraction.

Good Trading
Steve Peasley

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