Monday, November 28, 2011

Emerging optimism in the stock market

That was a nice pop at the open for the stock market, fueled by optimism for retail sales after Black Friday and some optimistic chatter from Europe, and has been sustained through the morning, but most of it was probably nothing more than short-covering. The open question is whether traders and short-term speculators are simply biding their time and waiting for "buying exhaustion" to hit before re-opening their short positions, or whether a majority of them have indeed reversed their bias from "risk off" to "risk on" and are now in the process of swinging the trading range back up after its recent descent. Flip a coin on that one.
 
Overall, the market is still in a lazy trading range, with significant economic uncertainty beyond the next few months.
 
Despite the decent retail sales news, Monday may still qualify for a "dead-cat bounce" since the market really was in a short-term oversold condition in which such bounces are common. We'll have to see how much of the morning's gains are still with us in a week.

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home