Sunday, November 27, 2011

Will the stock market finally bounce on Monday?

After such a long, unbroken series of daily declines, the stock market is overdue for at least the proverbial "dead-cat bounce", not to mention that the decent retail sales numbers from Black Friday could actually give the market a sound economic fundamental reason for bouncing. So, a bounce of some sort looks reasonably likely. The open question is how much "sell into any rally" sentiment is still out there. So, after any opening bounce we will have to see how that tapers off and either turns into a decline or becomes the foundation for a rise throughout the day. Whether a one-day rally can be turned into something more durable remains to be seen.
One good piece of economic news is not sufficient to build a sustainable, long-term market rally, but it is a start, a good start, and a necessary start.
Regardless of what the market does in the near term, the retail sales data does at least confirm that the economy really is a long stronger than a lot of the critics complain.


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