The Dow gapped up 200 points today and has held onto those gains through much of the trading day—a positive sign.
While this is in no way a definitive sign that the market is over its recent volatility, I like that in the absence of any real breaking news, the market rose. The European Central Bank’s decision to leave rates unchanged was widely expected. Apparently, no news is good news.
But big news is on the horizon and I expect that we will see the May pattern of trading activity continue. On Thursday, Federal Reserve Chairman Ben Bernanke will testify before Congress on the state of the economy. No matter what is said, this will cause the markets to rally or sell off.
The key in this market is to keep your wits about you and keep focused on companies with strong fundamentals. Overreactions to daily news events will push stocks higher and lower in the short term, but quality companies will be the most stable now and be the biggest winners in the long run.
I’ll continue to update you on al the latest economic and stock news in this daily blog so visit me each day for my thoughts and the actions you should take.