Friends
Here is how I can best describe what is going on in the stock market right now. Imagine a large spring that is being pushed down upon day after day by traders and investors. As the spring continues to compress it is storing up more and more energy that will someday be unleashed. Once the “fiscal cliff” nonsense is resolved (or even rumored to be resolved) the spring will be released and depressed stock prices will rise dramatically. So the question is, how much can the spring get compressed before we get to the release point (in other words how low do stocks go before politicians reach a solution)? Of course there is a danger that the spring will break altogether, but I do believe that even the dullest of politicians understand that they can’t let the spring break.
Anyway, once again stocks seesawed throughout the day, mainly in negative territory, and by the close the Dow Jones Industrial Average was down 28 points to finish the day at 12,542. The S&P 500 was down 2 points to close at 1353. Gold was down $16 to trade at $1714 per ounce, while oil was down $.88 to trade at $85.44 per barrel WTI. It is hard to get excited about technical levels holding, but at least 1346 on the S&P did hold today. Oh boy.
This has been a difficult week for stocks, and traders and investors are concerned about the perceived lack of cooperation on Capitol Hill. But remember folks, negotiations start at the extremes. You surely don’t want to show your hand too quickly. Let the process unfold. As I said before, we’ll get through this.
Have a nice evening everyone.
