Hey readers,
Hope you had a relaxing weekend; I sure did. Last week we saw very low levels of volume as we usually do this time of year. I expect those low levels of volume to continue until after labor day; when I expect we will see many of the big players getting back in the game.
Because of these relatively low levels of volume I expect this week to be marked by up and down channeling of the markets within a certain range. While the week looks as though it should be pretty uneventful for the most part as far as earnings reports and other data; there is one big piece of data being released this week. On Friday we will see the employment report for August. The market estimates guess employers cut roughly another 225,000 jobs during the month of August. This would bring the nations unemployment rate up to 9.5%. Besides the jobless reports we will also see some indicators of levels of manufacturing data on Monday as well as August auto sales numbers (which will be very much inflated due to “Cash for Clunkers”; which is now over) on Tuesday.
This market is looking for some defining information which will give it some direction as to where it needs to go. Recent economic data has been constantly mixed, not only mixed but even contradicting. An example of that is in the last month we saw that new and existing home sales were both up. This should mean the economy and housing market is getting better right? However over the exact same time period delinquencies and foreclosures were up as well. This means things are getting worse; but how can things be getting better and worse at the same time? The markets simply don’t have enough data to know exactly which way they need to go right now. That is why as I have discussed in multiple updates lately; for now I am trading news and momentum. Last week I put stock alerts out for J. Crew (JCG), Dell (DELL), and Intel (INTC); all off good news and momentum. If you kept up with the blog and got in on those trades you made some nice profits last week.
We haven’t seen a ton of news coming out this weekend which caught my eye for long enough to make me want to buy. One thing I did notice which I want to watch tomorrow is General Motors announced it is starting up a 50-50 joint operation in China. This news very well could make the stock jump tomorrow. I don’t like this as a long term trade because the other half of the 50-50 joint operation is a government owned Chinese company; and there is simply to much unknown there. However short term I think we could definitely see some action with this one. GM is now trading under the stock ticker (MTLQQ).
Be sure to check back before the opening bell every morning to get my insights as to what is driving the market, and what will be making us money. I’m in the game to make the big bucks, I hope you are too!
– Leverington 9
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