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Up or Down

October 29, 2010 – 5:01 pm

The third quarter GDP was reported this morning and it was up 2%. This is the first of three numbers as it will be adjusted two more times during this new quarter before we get the real final number. This was a good number, a little less than expected, but still a decent growth number.

The important question is can we sustain this growth and actually increase it? That question the stock market is trying to answer. So far since September the answer has been yes, but this week we have seen a consolidation effort, meaning the stock market churned sideways. This could mean a rollover with a correction coming or a pause in a bull phase that will continue after the elections are over.

The elections could also be the reason for a small sell off no matter what the result. Since no one can really determine what will happen after next Tuesday’s election I believe we need to focus on economic numbers and they have been showing small improvements. As long as that continues it is wiser to be in the market.

It helps that corporations are bulging with cash, the grease that lubricates the economic wheels, and the Fed with its proposed GE2 is adding its lubricant to the system.

Good Trading
Steve Peasley

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