Morning update 8/23

This morning started with a mini rally in the markets which quickly turned around to a decline.  I stayed all cash sensing the rally might be a bull trap.  Though my concerns were confirmed, I still don’t see enough of a clear picture to take a position either way.  The bulls and the bears are in a big fight, with the bears having a slight advantage.  It’s been a few days since any major economic numbers surfaced, so perhaps there won’t be a great opportunity until tomorrow when home sales date is due to disappoint with a projected drop of about 5.1%.  Should the number be worse it will send tremors throughout the market and precipitate equities lower.  Faced with a  bleak economic environment, I don’t see investors taking too many risks on the long side.  As always though, surprises do happen and the key is to be ready.

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