Once again a market not for the faint of heart. Just when it looked like we were heading below 10,000 the Dow raced back up over 10,400 on Friday. You can thank earnings, you can thank the European banks for the most part passing their stress tests, you can thank the market technicals or you can simply thank the fact that we still remain in an interest rate environment that is simply bullish for the markets. I continue to believe that the latter is the main culprit for the recent market floor. We have pulled back below 10,000 multiple times over the past few months only to be met with tremendous support and subsequently race back above 10,000. When treasuries, money markets and C.D.’s continue to yield next to nothing, where else can the $trillions of global dollars that are sitting on the sidelines go? With all of the uncertainty that still exists in the global economies and with continuing high unemployment,  you ask how can the stock markets continue to be so resilient?

Well there are companies that are knocking it out of the park, so yes certain earnings are contributing to the market behavior and yes technically speaking it looks like the 200 day moving averages are being threatened to the upside, however as long as yields remain at historic lows I believe we will continue to see impressive support on pullbacks in this very volatile market.

Have a great week.

~George

Up to this point the 2nd quarter earnings reporting season has been coming in mixed  with companies like Intel and Apple having their best quarters ever and yet other companies such as Bank of America and Citi struggling through this unusual cycle. Then you have the Fed chairman coming out yesterday proclaiming uncertainty in the economy in his semi-annual report to Congress. Not the events you want to see unfold if you are hoping for stability in a market that has been exceptionally volatile over the past few months. Well it looks like the mid-term elections are needed for the “catalyst” that could take these markets out of its recent uncertainty with the hopes that new blood can begin to take this economy and country in a much needed better direction. Until then lets see how earnings season wraps up over the coming weeks and look forward to new beginnings in the fall

Sincerely,

~George

The markets got slammed today from an unconfident consumer and bank profit woes from two of the majors. This was the recipe for the sell-off and the continuation of the extreme volatility that we have witnessed since early May. In my previous posts and today, this type of volatility continues to be my concern and it can very unnerving for any investor except for the day trader which for them this market is a dream. Just last week the Dow, Nasdaq and S&P 500 rose over 5% and the rally continued this week until today. I think we can all expect more volatility ahead especially as more companies report their 2nd quarter results. So let’s fasten our seat belts and see what next week brings.

Have a great weekend.

~George

The markets continue their torrid pace and why not with Intel reporting their best quarter in their history. This should bold well for the other tech titans such as IBM, Hewlett-Packard and Dell. The markets were telling us something last week when it surged over 5% in just 4 days. I would like to see other sectors such as the retail and energy space demonstrate such an earnings punch for then we can begin to see a much broader recovery in the works. Keep in mind the upcoming mid-term elections could be the 2nd catalyst that lifts these markets further. I will try not to get too excited yet for there are still several macro economic concerns to contend with, however let’s embrace what is in front of us and hope to continue to see corporate strength and begin to see some meaningful job growth.

All the best.

~George

So now we will see if the upcoming 2nd quarter corporate earnings reports can carry this impressive 4 day rally forward. Certainly these markets are not for the faint of heart. With the markets falling over 10% in the 2nd quarter and experiencing wild weekly swings in the same period, and now going up over 5% in 4 trading days this past week, market action like this requires a strong stomach. That said, this type of action is a day traders dream and that ilk must be having a field day.

I have been hoping for stability in the markets which I do not think we are going to see for a while. Especially with reporting season here and the upcoming fall vote. One just has to hope that this upward movement becomes a long lasting trend in this very volatile market and hopefully this was the week that every one refers to as the starting point.

Have a great weekend.

~George

The markets are off to a great start this shortened trading week. Earnings reporting season has arrived with the bulk of the S&P 500 companies due to report their 2nd quarter results over the next 2-3 weeks or so. Will this be the catalyst that sends the markets higher in the second half? Or could it be the upcoming fall vote of midterm elections? Or the combination of the two. Historically as the midterm elections near, stocks tend to perform much better. Since 1950 and in a midterm election year the markets have gone lower in only one year during that span and that was in 2002. Lets hope that history is on our side and we can see some type of market gains in the second half or at the very bare minimum market stability. As far as the small cap and micro cap space is concerned, seemingly the overall markets must strengthen for the junior exhanges to also experience an upward trajectory. For the first time in many months the bulletin board gross dollar volume decreased in the month of June compared to June of 09. That said the overall markets have been in a significant downward trend over the past two months or so and this is why some type of catalyst is needed for a meaningful turnaround. Hopefully at least one of the aforementioned scenarios provide such a catalyst.

Stay tuned and good luck to all.

~George

Private hiring is still very tepid. 83,000 new private hires occurred  short of the consensus estimates of 112,00o0 and far short of what will bring down unemployment in a meaningful way. Companies are hiring but just at a very slow pace. That said, the markets took it on the chin early with the Dow falling over 100 points and the S&P touching the 1015 level however the markets did close off its lows. I continue to believe that once the 2nd quarter earnings reporting season kicks into full gear, this will be the one of the key confirmatory catalysts which will determine the markets direction for the second half of the year.

In closing, no matter what the political and economic deficiencies are in America, there is no place like America. We all cannot forget or take for granted the freedom and liberties we do enjoy and no matter what, we always must have faith in our system and in our country and  must believe that somehow and in some way this country will figure out.

Happy 4th of July and God Bless America.

~George

Now what the heck was that all about? Well you can start with the fact that the markets have moved approximately +60% since the bottom was put in in March of 2009, or you can blame it on the European crises, or you can blame it on the incessant high unemployment or you can blame it on Washington’s economic policies or etc.etc.

Point being there are a lot of reasons and excuses for what is going on in the markets and the economy. But from my perspective, until there is sustainable job growth in this country and abroad all markets will remain volatile, vulnerable and subject to the day to day, week to week and month to month political and economic headlines. This is a very complicated economic and market enviroment that we are in and it demands patience and prudence as it pertains to any investing decisions.

Earnings reporting season is upon us so this will certainly give us clarity as to the health and growth of sectors and companies.

All the best.

~George

This question now looms. On Friday the labor department will report the June unemployment numbers. Also things seem to be quieting down a bit over in Europe. So with the market correction that has taken place since the April 26th highs, are we fairly priced now and are the current risks factored in? To me the market action looks like a catalyst is needed for confirmatory direction. I have said in my previous posts that just maybe the upcoming 2nd quarter earning season could very well be that catalyst. This week should be pretty mundane although there could be some institutional window dressing at quarters end which is Wednesday and of course the Friday’s jobs report could be a market mover.

Wishing all a very good week.

~George

An article out today in the Wall Street Journal indicates that short term interest rates could remain near zero as far out as 2012. This consenus by most economists is due to the Feds assessment of the current state of the economy and how the European weakness could affect our economy here at home. As counter intuitive as it may seem this should be very bullish for the markets. Yes bullish! As long as the Federal Reserve and their international counterparts continue with accommodative interest rate policies, monies should not only continue to be deployed into the markets but at a higher velocity. Most mutual funds, institutional investors, hedge funds and individuals for that matter cannot afford to sit in sub 1% money. They have target returns that must be met or they risk the attrition that would occur with investors seeking to achieve their investments objectives. Time will tell how this plays out and when the Fed will begin to change its stance and until then let’s see how the upcoming 2nd quarter earnings look.

Good luck to all.

~George