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Market Reversals Are Hard to Navigate

Oct 02 2009

Market Reversals Are Hard to Navigate

The market has reversed itself from the high reached after the Federal Reserve Meeting ended in September and is starting to move lower on a consistent basis. It’s a good time to be neutral in your portfolio with a slight negative stance. With earnings season around the corner starting in Mid October and the Holiday season to follow, the markets could reverse themselves once again. So watching the action of the major indexes is important and adjusting weekly is necessary.

Economic Reports This Week

This week also saw some poor economic numbers, below what was expected by the market. Consumer Confidence can in weak at 53.1, ADP Employment was –254,000, Chicago PMI 46.1 vs 52.0, Initial Claims at 551,000, the ISM Index at 52.6 vs 54.0 expected, and Non Farm Payrolls –263,000 vs –175,000 expected. A couple of good numbers included GDP for the 2nd Quarter, Personal Income, and Personal Spending. But the bad outweighed the good and the market traded lower all week.

Economic Reports Next Week

Next is a very little economic calendar week which is a good thing as the bad numbers are making any advance near impossible. Initial Claims are released on October 8th with a couple less important reports coming out at the end of the week including Wholesale Inventories and the Trade Balance. If a couple companies can make positive adjustments to their earnings predictions prior to the start of earnings season, the market could stabilize next week before a new rally at the start of earnings.

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