The Markets

I hope everyone had a wonderful Labor Day. I know I did. Spending time with the family is always a great way to relax and bring summer to a close. Can you believe the unofficial end of summer has passed? I can't. It seems like yesterday we were talking about Memorial Day activities, getting the grill ready, and summer vacation for kids. Now we're ready to pull out those jackets and coats for their annual trip to the dry cleaner.

While I'm not glad to see summer go, I am glad to see the markets finally snap a three week losing streak. So what happened? Why the seemingly rebound? A couple of things happened:

1. First, even though many prognosticators have been predicting doom and gloom, the markets are actually in a trading range and have been since the end of April. while I don't believe the markets will break below previous support levels and retest the lows of last year, I do believe it will take some convincing for the markets to break out above this trading range.
2. Second, when the markets hit the bottom of this trading range, it looks for a reason to bounce back up. It got those reasons with stronger than expected manufacturing data from the U.S. and China. On Friday, the jobless rate ticked up to 9.6% from 9.5%. The silver lining in that report was that the private sector saw more job growth than analysts had fore casted.

Interesting enough, September is typically a bad month for the market on record. However, after only three trading days, we are already seeing strong positive numbers being posted. I've mentioned before that summers usually are a slow, boring time for the markets. There's an old saying; "Sell in May and go away." IF economic numbers show any indication of strength going into the fall we could see last week's activity as the possible beginning of a significant change.