Thursday, March 20, 2008

Thursday Morning Psychology

Good morning, good afternoon, and good evening to all around the globe! Today's trading will continue to be volatile. The whipsaw movements in the financial sector are spreading into the commodities sector. Look at a chart of Gold and Oil over the last week and you'll see that Institutional money has been selling and switching into other asset classes. This phenomenon is expected at quarter’s end as traders take some profits and ponder what to do with the capital. That said, we don't see any reason to add to a ‘long-term’ account such as a retirement or college savings account until the S&P stabilizes in the 1,330 range. Although we are presently more optimistic since the retest of 1,270 on Monday, we don't want to see any of our readers ride back down, not having displayed discipline and patience (two must have traits in making money in the stock market) . Initial claims for unemployment continue to rise. This morning’s figure of 378,000 claims was a troubling 22,000 higher than the estimate for the week ending March 15th. We still await the Philadelphia Fed manufacturing survey at 10:00AM ET, which measures manufacturing activity and forecasts inflationary pressures. A number above 50 shows expansion in the manufacturing sector; below 50 shows contraction. This number is definitely market moving. We will update you once more in the afternoon; thank you for understanding the Psychology of this Call.

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