Quiet Week For The Stock Market

Well it was a pretty quiet week for the market. Not much action as the Dow closed down 89.53 points from last Friday’s close. This works out to be a little under 1.0%. Like I said from previous posts the market hasn’t found a sense of direction. Jobs continue to be weak and there was no real data for investors to have a reason to put money to work this week.

The next economic data point will be released on Tuesday when the existing home sales are released at 10:00 a.m. Obviously we would like this number to improve to allow the inventory in housing to decrease. The expected number is 4.75 million. A significant rise above this number would be great as it gives the market a positive catalyst to invest upon. Decreasing the inventory in housing will allow prices to stabilize as I learned in my economics class back in High School that it’s all about supply and demand. If you reduce the supply the demand will increase and vise versa. Increased demand = stable/higher home prices. This is what we want.

The one economic data point that will truly move this market higher is to release on Thursday at 8:30 a.m. This would be the Initial and Continuing jobless claims. This has been the reoccurring sore spot on the market. A positive surprise to the upside (lower jobless claims) will be a plus for Thursday trading. However, the jobless claims need to continue to decrease in back to back months in order for investors to change their negative approach to the job market.

I hate to say it but with the inconsistent economic data this stock market will continue to be volatile. Positive news will send the market higher. Negative news will do just the opposite. We will continue to go from one extreme to the other week after week. I have never experienced a market that is so confusing. Consistent improvement in the economic data is the only true remedy. Even though this will be a short term negative, investing is meant for the future. Right now the market is actually buying you time to invest at great prices. So please take advantage of the ups and downs of the market! Invest more! At least the stock market isn’t dropping like a rock like it did back in 2008.

With no economic data for tomorrow I think we may get lucky with a positive day as short term investors will position themselves for the upcoming data later in the week. Yes this is very short term thinking, but that is the way investors have come to respond. Short term data = short term responses. My advice is to think beyond week to week. Think long term! Get use to long term thinking as investing is for your future. Your future well being!

Happy Sunday!

Clay-

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