S & P 500 Up 7.5%

Good News! The S&P 500 is up 7.5% between July 8 and July 17! In a period of about a week and a half we saw the S&P 500 go from 875.07 to 940.31 on recent good news. It is being reported that various aspects of the economy seem to be showing signs of either nearing a bottom or possibly bottoming out. This, it would seem, has pushed the stock market up in a meaningful way in a short period of time. On the flip side of this is the fact that from January 2 of this year through July 17 the S&P 500 has gone from 931.80 to 940.31 or up about 0.9%! So, is the glass half empty or half full? I don’t really know. In looking back on the past month we saw the S&P 500 close at 944.89 on June 11 then go down to 875.07 by July 8 to return to 940.31 on July 17. In other words, the S&P 500 went down 7.4% then went up 7.5%. As this up and down process went on from mid June through this past Friday, the 30 day average volume on the NYSE has been going down. Lower volume is not the normal condition for the beginning of a new bull market. Whatever is going on, this sideways movement of stocks would appear to be containing the trading range with no dramatic current movement either up or down. My expectation for the market this summer has been either no substantial change or a gradual move downward until mid September. The positive surprise has been some of the good earnings reports and the fact that they seem to have had an impact on the market. Perhaps the lack of volume is due to the summer doldrums and investors waiting for the main event: earnings reports for the third quarter! Ed