Market Update

Now that FOMC Bernanke has spoken and President Bush has spoken the volume in the markets has essentially dried up. There is a directionless intermission here as the news is digested.

I would like to point out however that as the morning has progressed the movement of money back into bonds for safety has resumed. A bull market can not take place until there is a substantial movement out of bonds. Until that happens any advances in the markets are prone to failure. Market advances require volume in order to hold. This can not be stressed enough.

Two things are missing today to make the advance convincing. Volume, there is none. And money in bonds is still holding firm there. Until we have substantial volume (conviction of the moves) and a sign that money is leaving the bonds and moving into stocks then any movement is at risk of failing.

If you are sitting in any long positions today and are showing a profit then you should take your profits and close out the position. Next week will be an unknown and you should not put your gains at jeopardy of turning into a loss. There is not enough volume today to warrant that this advance will hold.