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Do Not be Fooled

January 27, 2012 – 6:09 pm

This morning the first look at the fourth quarter GDP number was released. It rebounded from a low 1.7% in the third quarter to 2.8% in the fourth. That was less than the more optimistic expectation of 3%. For all of 2011 the GDP number looks to be about 1.8%. We won’t have a final number for another month or two and by that time we won’t care. In fact looking back to the fourth quarter is interesting but does us little good when investing in the market.

As an investor and trader you need to look forward and in doing so we see complacency, or in other words, too many people are expecting calm and that the market will continue to rise. That will not last. We have had a period of low volatility so far this year and history is likely to reassert itself so expect a pick up in movement but not necessarily to the upside in the short term.

The market is cheap and fundamentally it appears that this year will be good one for stocks but there will be swings up and down and we are due for a down movement. That movement will give everyone an opportunity. Do not fear the coming correction but use it to your advantage.

Good Trading
Steve Peasley

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