Was that a collective yawn or a deep breathe by the markets?

Holiday, vacation didn’t phase the market to move higher. S&P 500 moved higher by 1.2%, Nasdaq was up 2.5%, NYSE composite index added 1.4%. Volume on the Nasdaq and NYSE composite ended 7.8% and 6.6% higher than previous week. Don’t get all excited, this was below 50dma. Path of least resistance remains flat, low volume rallies do not change the path of least resistance.

One thing about this rally is that we haven’t had the volume to support the move higher. We can chalk it up to the long labor day weekend, I can give this a cautionary pass.

Labor Day kicks off mid-term election, look for democrats to focus on the War on Terror and the economy. The lack of consumer confidence could be contributed to the democratic party desperately trying to gain congressional seats. While I am neither a registered republican or democrat bashing the economy just isn’t a smart thing to do when it is healthy. GDP growth has slowed, but steering a multi-trillion dollar economy is a very tough job to do. At the moment, what leads the head lines is G.W. Bush’s war on terror. Democrats should focus on how to approach the war better and not how well it is going or not going.

September historically is the worse month for stocks, look for a pull back at some point. Keep cash on hand, keep new buys light.

Good luck and see you at Investors Paradise.

MktSpec