OK; I’m back after taking a break Friday and Monday.
Over the scary and volatile months of August and September this year the stock market has basically been in a trading range between 1,120 and 1,220 on the S&P 500. Moves within the range have been very sharp but hey, it’s all been within a 9% range.
The key is which way it goes when it does break out of the trading range. It is only 2.3% below the top of the range and volatility has been decreasing. That would argue for breaking out higher.
Bad news out of Europe is probably the main thing that would cause the market to reverse and drop below the trading range. I think the Europeans will choose massive programs to preserve the European Union and their banks and you will hear an announcement on that in the next two to three weeks.
Stocks are up 2.5% today, 3% for small stocks and 4% for some European markets. Bonds are down slightly and gold is up 2.5%.