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The Meaning of Good and Bad News

April 23, 2010 – 9:36 am

This has been a very good week for earnings and economic statistics. However, it has not been a very good week for stock prices. That does not mean it was a bad week either. Good news does not always push stock prices higher just as bad news does not always push them down. In this case many people expected good earnings and the prices of stocks have already risen to reflect that good news. This is one reason why a correction is in our future. The market moved up this week but not nearly to the extent you would expect with the much better earnings reports than any of us expected.

However, all the excellent earnings reports and guidance for better numbers next quarter and the stronger than expected economic strength may mean that any correction we might have is going to be short and small.

It is not a good idea to sell all of your stocks but having a little cash to buy some is probably a smart move. Buy on any weakness and hold on to your solid growers.

Good Trading
Steve Peasley

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