Exposing Ideas to the Envelope of Serendipity

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Friday, October 29, 2010

Near-term Cautious

With a confluence of economic data, the expectations and uncertainty of QE2, the upcoming mid-term elections, an FOMC interest rate decision, and a rally that is showing increasing signs of strain, there are more than a few reasons to exercise caution while everything plays out. October, as expected, has been marked with considerable volatility, and more recently a good bit of price "churning" just off recent highs. At the same time, market breadth has weakened slightly and some sector rotation has been taking place. While the Nasdaq indices have barely flinched as the rally's undisputed leaders, the $SPX has struggled to advance in recent sessions, with greater numbers of stocks undergoing price corrections as the rally has come under some pressure. There are many mixed messages right now, and they need time to resolve.

Trade well.

-- Brinkley
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