subject: Stock Market Education Pt1 [print this page] Daily Stock Report for Monday Morning, November 23, 2009 pt1
The slight correction in stocks continued with a 3rd consecutive down day Friday after the US Dollar increased in price and some key missed earnings reports.
The stock indices still made a gain during the week by approximately 0.5% although the last three days appear to be the start of what we expect to be a slight and short pullback that could last another 7-10 days.
My suggestion for you to consider is to be more selective in smaller long positions, some short positions for more aggressive investors, and more cash on the sidelines until we get a clear bottom in which to buy more long positions.
Economic data worth noting this week is the existing home sales on Monday, new home sales on Wednesday which are expected to be the highest since July 2007. This may not be important data now that earnings of DHI, D.R. Horton posted losses twice as much as expected.
On Tuesday, the Gross Domestic Product (GDP) could be data that the market reacts to with the lowering of expectations from 3.5% to 2.9%. Also on Tuesday are the notes of the Federal Open Market Committee (FOMC) meeting notes that may give some clue to the intentions of the Federal Reserve. Federal Reserve Chairman Bernanke has made it clear that they plan to keep interest rates low for an extended period of time because of high unemployment and low inflation.
The week of Thanksgiving usually has a bullish bias to the market as many traders are taking the holiday week off. The day after Thanksgiving, known as Black Friday will give us some indication of retail sales and an indication of what the Holiday sales will be. This year in particular, the market analysts will be using this as an important indication of the state of the consumer, which is the biggest driver of the market. NOTE: This Friday is half day trading and closes at 1pm Eastern time (ET).
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