Where Do We Go From Here?
Commerce Department. The second quarter Gross Domestic Product reported was 2.4%. This is sharply lower from the revised first quarter number of 3.7%. Economists had expected the second quarter number to be 2.5%. Therefore, today's number was not a big surprise. What does this all mean for the market?
Well, today the market is starting out under pressure with the SPDR S&P 500 ETF (NYSE: SPY) trading lower by 1.06 to $109.20. Most commodity stocks are under pressure this morning and this is a sign of deflation. Leading commodity stocks such as Cliffs Natural Resources Inc (NYSE: CLF), and Southern Copper Corp (NYSE: SCCO) are trading lower and remain under pressure. Remember when the U.S. Dollar Index is trading higher on the trading session this will often push the commodity stocks lower. Therefore, always keep a dollar chart open as most professional traders will key off this chart. Remember when the dollar is higher the stock market indexes will deflate. Should the dollar decline or sell off the market will inflate higher.
Since the July lows the markets have surged higher climbing about 10.0 percent from that level. However, since July 16th, the major indexes have been very choppy and volatile. This type of volatile action could be expected going forward. Please remember to keep an eye on the U.S. Dollar Index as that chart will generally give traders a good indication of where the stock indexes are trading. This morning the U.S. Dollar Index is trading higher by 0.15 cents to $81.79 and the market is obviously trading lower.
Nicholas Santiago
Chief market Strategist
www.intheMoneyStocks.com
