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Where are we Going?

December 11, 2009 – 10:26 am

This morning the dollar spiked and the stock market started up as well though the dollar’s strength is threatening to pull stock prices back down. We are starting to see a small, very small, change. The market no longer collapses when the dollar gets stronger.

The reason stocks rose this morning is because of a much better November retail sales report than expected. Also, consumer sentiment in December looks more positive than in November. The market is moving on economic news waiting for next month’s earnings season to start.

Exports last month overcame imports with a sharp decline in the trade imbalance. The strengthening dollar this week pushed gold and oil prices down. There are so many factors that are in a state of flux that the market can not decide if it should continue the rally or start a new pullback phase.

This confusion is keeping the retail stock buyer on the sidelines. You see it in the trillions of dollars still in money market funds. Fear is holding them back. As long as we have fear the stock market will likely continue to crawl up a wall of worry. However, that wall is getting pretty high of late. The indexes are moving sideways. They will break one way or another soon, but as long as the trend up is not broken you stay with the market.

Good Trading
Steve Peasley

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