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Economic Review

8/31/2009

Well, it’s just about that time of year again…the end of summer and a return to higher volume trading.

The Doc left you early this past summer mentioning that he would tread light on interpreting market moves, as many global players focus more on vacations and market activity is characterized by thinner volumes.  Although it may be a few days early to sound the beginning of a return to normalcy, we’ll just say that things may get a bit more interesting soon.

The real talk of the markets over this past summer was the continued and almost unbelievable rally in US Stocks.  The bulls continue to justify the move by mentioning that inventories are light and business activity will have to improve to rebuild them.  The Doc says…is that all you got?  On the bear side, one could write a book on why the market is simply laden with risk at current levels.  That being said, can Stocks continue to rally?  Of course they can. As we mentioned before, Stocks rallied for years based on a false economy underpinned by the unsustainable real estate bubble.

Bottom line at this point…let price action roll for a few days and get a feel for volume in conjunction with price action and remember, the market has a boat load of risk at current levels.  How big a boat….let’s give it a 45 footer, twin engine size.

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