Friends
Trading for August came to a close today and not a moment too soon. What a month we had. The final tally shows the S&P 500 down about 5.5% for the month after being up 5.97 points today to close at 1218.89. The Dow Jones Industrial Average finished the day up 53 points to close at 11613. On a technical basis it was nice that the S&P was able to close above the 1200 level. As we pointed out, we want to see confirmation that 1200 can now be a trading support level and traders can focus on 1250 as resistance. With the economic reports we will receive the next two days, calling the close for the week is anyone’s guess. Once again, we will be focusing on Friday’s employment number to set the tone for September.
As for today, the ADP jobs report was about as expected, and the Chicago Purchasing Managers Index as well as the Factory Orders reports were actually a little better than expected (but by no means good). But the biggest story of the day was that the Department of Justice filed suit to stop the proposed merger between AT&T and T- Mobile. Despite AT&T’s claims that the merger would provide investment and jobs into the economy (a commitment to up to 5000 call center jobs brought back from overseas), the DOJ seems more concerned about the competitive disadvantages that may occur. It’s not like we need jobs in this economy. This government finds new ways to discourage business each and every day. AT&T being headquartered in Texas, I am sure has nothing to do with today’s ruling. Did I just get political again?
Anyway, as we look into September, we enter what is usually the most volatile time of year, and we would not be surprised to see a test of the August lows over the next 30 to 60 days. The longer we can hold above 1200, or better yet get through 1250, the better we will feel that the lows for the year have been made. We continue to look for opportunities on the selloffs and are not afraid to sell some things on rallies.
Thank God August is over. Let’s see what September has in store for us.
Have a nice evening everyone.
