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Hope and Possibilities

November 28, 2011 – 6:26 pm

We had a surprisingly good Black Friday shopping weekend, and there were some hints of a rumor coming out of Europe that they are going to tie themselves to each other more tightly financially. There are talks that the ECB could act more like our Fed which would issue and buy EU bonds issued by any country in the EU.

Sales on Black Friday rose 6.6% from a year ago, much better than expected and cyber sales were even stronger. This is a good start for the holiday sales season which gives hope that retailers’ profits will rise while at the same time boosting prospects for exporters around the world, especially China. Of course one day or weekend means little but at least the direction is positive and it is the most important weekend for retailers of the year.

More importantly the European issue improved just a little. However, that improvement is more wishful thinking than any concrete progress thus far. There is no doubt the worry is and has been overdone, but the weak response to the debt crisis by the EU is certainly clear.

The stock market was looking for anything positive to rally. It was oversold as traders and investors panicked out as fast as they panicked back in during October. In the current environment common sense seems to be scarce. If it was a tradable commodity it could be bought for pennies as nobody seems to want it and few actually use it.

Good Trading
Steve Peasley

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