Friday, December 02, 2011

End of a decent bounce-back week

For all the hoopla, the market managed to "claw back" in five days roughly what it had lost in the preceding seven trading days. That was a lot of work for a net gain of... nothing. Unless you were a brokerage firm and collected the commissions for all those trades. Still, it was good to see that the market was able to score and keep a significant gain for the week. Maybe, just maybe, the stock market and the economy are not in as bad shape as many of the cynics complain.
 
Friday played out roughly as expected, with a pop at the pop due to the semi-decent employment report, followed by a slow bleed of those gains through the day, as short-term speculators took profits ahead of the weekend when anything can happen. The good news was that the market managed to end flat for the day rather than with a heavy loss.
 
Friday was just the first major checkpoint, holding the gain from Monday and Wednesday. What I really want to see is if the market can hold these gains on Monday, in a fresh week when everybody has a fresh perspective after the weekend, and the cynics have a whole week of trading ahead of them to try to manipulate the market.
 
We could see a few more tentative, "consolidation" trading sessions this coming week as traders and short-term speculators wait (im)patiently for either "the next leg up" or for the rally to "run out of steam", reverse, and head back down towards the lower end of the trading range.

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