Wednesday, July 27, 2011

Still not a rally

Today the S&P 500 index closed at 1305, a level which has acted as a quasi-price floor for much of 2011, with the exception of the corrections in March and June.

The S&P has been in neutral for most of 2011, having yet to rise above the April 29 high of 1364, or to pass below the absolute floor of 1255. This is a narrower-than-average trading range for a seven-month period. Surprisingly, sentiment is also neutral right now despite the news of a potential government default, so I won't attempt a short-term stock market forecast.

I hope all good folks out there have made preparations for national/global financial turmoil. Even if Congress and the President reach a stopgap budget agreement by August 2, the long-term prospects for national solvency do not look good.