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Market Direction

January 27, 2010 – 1:38 pm

Market Direction

The news that appears to be moving stocks is away from Wall Street. Trouble over Bernanke’s reappointment, Geithner under fire concerning the massive money spent on the AIG bailout and the concern over the President’s first State of the Union message tonight all seem to be resulting in a hesitation in the market this week. It can’t decide on a direction this week so far.

Earnings are still pouring in for the fourth quarter and they are very good, but that’s old news. What will set the new direction? It probably won’t be earnings news.  It will have to be further signs of a recovering economy, but we won’t see that kind of news until next week and the week after. This Friday we will get the first look at the fourth quarter GDP. It will be up and strongly compared to previous quarters, but that too is backward looking.

The market looks forward and at this point it is hard to determine what it will react to.  We had a 5% correction last week which is a minimum correction. The market is on a knife edge. Will it correct to a more normal 10% or regain its footing? We will have to wait and see.

Good Trading
Steve Peasley

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