Thread: A Look Forward

I listened passively to the media today in my car on XM radio, and a little on TV. I heard about a good market performance, a pat on the back that we made it through 2008, but I only heard a fleeting reference to next week's Unemployment Report, and I heard no reference to Same-Store Sales coming next week.

Pushed to the side was this news this morning of the ISM Manufacturing data, which was the worst in 28 years. I am sure it received a brief mention upon release. So it is bad, and I think it will only get worse. With respect to the market, bad is priced in -- worse is not.

Still, the market did well today, and if you can take advantage of that then good for you. It will be interesting if we get more volume to see how it reacts. Were today a heavy volume day, 1000 on the S&P would be in the realm of possibility. I think that at least once this year we will rally to the 200-day EMA, or even the 200-day SMA. Whether that comes as the result of a rally in the near term, or a significant marking of time and allowing the average to come to us, I don't know.

Still, I am not convinced that the risk outweighs the reward quite yet. There are still structural problems with the overall economy -- things that get exacerbated every day. I'll touch on some of those things in coming missives.