The last three trading days have been interesting. The DOW was +130 Friday, -140 from top to bottom yesterday and today +100. This is a sign of indecision on the part of the market and implies that something will be resolved soon, either a big breakout to the upside, or the start of a pullback. Either way, the trading action has been great.
The CBOE had this to say today:
Economic growth will remain slow this year, CBO anticipates, as gradual improvement in many of the forces that drive the economy is offset by the effects of budgetary changes that are scheduled to occur under current law. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and interest rates to eventually rise from their current low levels. Nevertheless, the unemployment rate is expected to remain above 7.5 percent through next year; if that happens, 2014 will be the sixth consecutive year with unemployment exceeding 7.5 percent of the labor force—the longest such period in the past 70 years.
News flash. No one cared.
Washington is on the cusp of a new chapter in saber rattling, jockeying for position and talking points. Talk of more taxes and cuts in entitlements will be all the rage again with the kids on The Hill. Turn it all off and just watch the market. Unless of course you can tell me the last time a Congressman made you money.
Oh, and by the way, Europe didn’t fall into the Mediterranean today either, and the euro is going higher.
Come by for a free trial here.