No Follow-Through from Last Week's Market Swing
Remember the good old days?
Late last week comes to mind. Stocks actually enjoyed a nice rally instead of getting torpedoed by political hacks…
“This monster move comes to us courtesy of our dear friends in Washington,” I wrote early Friday morning. “In their infinite wisdom, they blessed us with the beginnings of negotiations that could (maybe) end the standoff over the 10-day old shutdown…”
That’s one of the most crucial “maybes” I’ve written in a while. Our fearless bickerers in Washington made sure of it over the weekend when it became clear that the chances for a timely deal were slim.
Of course, the futures market took the full force of the blow late Sunday night. S&P futures gave back as many as 18 points to start the session. The Dow dropped 100-plus. Not exactly the follow-through from Thursday and Friday’s gains investors were hoping for…
As of right now, S&P futures are down about 12 points. That’s more than enough to erase Friday’s gains.
I’ve shown you the ridiculous readings on Gallup’s economic confidence poll. Well, now it’s gotten even worse, falling from -35 to -43.
“Already we’ve seen the largest drop since Lehman, and it’s continuing apace,” reports Business Insider. “Real damage is being done by this fight, even if there’s no debt ceiling breach.”
Fear is beginning to show itself. So you need to prepare for a potentially wild week. At the moment, there’s nothing we can do to escape this headline-driven market. The most important thing you must remember is that a last-minute debt ceiling deal is no guarantee that the market will snap back into formation and march higher.
Now is the time for careful, tactical trading. Get ready for a wild week…
Regards,
Greg Guenthner
for The Daily Reckoning
Ed. Note: Tactical trading… heh… Indeed. But what does that mean? And how do you make that work for you? Greg Guenthner explains just that in his Rude Awakening email edition, complete with no less than 3 chances to learn about specific profit opportunities, every single day. It’s just one small benefit of being a reader of the Rude Awakening email. Don’t miss another issue. Sign up for FREE, right here.
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