Lift Off

The markets are soaring higher today on a "resolution" to the European debt crisis.  It is hard to argue with the tape as the markets have staged an unbelievably impressive rally since the first week of October.  The news out of Europe was just fuel for the fire.  The markets have been overbought for a couple of weeks but that has not stopped the bulls.  Significant resistance levels were taken out today and higher prices look likely for the rest of the year and into next.  With the European debt issues off of the front pages for awhile, the markets can focus on a slowly improving US economy and earnings that have turned out to be better than many expected.  There is no doubt that Europe will return to the front pages in the coming months as the current solution just buys a little time.  Spain and Italy remain embroiled in their own economic troubles and their economies make Greece look like a pittance.  But that is an issue for another day.  Today the world markets are celebrating and the celebration should continue on for awhile though there will be bumps along the way. 

What's next?

Markets were up strongly yesterday on the hopes that Europe will work something out.  We'll soon see as the European leaders meet on Wednesday to try and craft some type of plan.  Historically, next week marks the worst week of the year.  With the market overbought and seemingly postured for the good news out of Europe that may or may not come, we would expect lower prices early in the week.  We do think that after a period of consolidation or correction, that the market will continue its uptrend possibly into the end of the year and early next.  It is likely that we will move back into the market next week after being market neutral.  We will see what the week brings.  Many of the indices have made small breakouts from the trading range and if those levels can hold would be very positive.  Much can happen over the weekend so we will watch to see what happens during the first part of the week. 

More of the same...

The market looked like it was going to shrug off a number of poor earnings reports today as the market was flat for most of the day.  In fact, we were just about ready to make a few trades and move to a less defensive position before the market sell off started shortly after lunch.  We will wait and see what tomorrow brings.  The upper edge of the S&P range at 1220-1230 has proved to be stout resistance and we would like to see the market go through this before getting too excited.  A revisit to the lows at 1100 is not out of the question considering the volatility the market has experienced over the last few months.

WELCOME

Welcome to the extended version of the BAM Market Wrap.  We are not bloggers by nature but have had clients and friends inquire about our market thoughts in between our newsletters.   The number and content of posts will likely be determined by the conditions of the markets and the interests of our readers.  We would greatly appreciate your feedback.