Get Ready for 6 Week Summer Rally it Started last week.
The Stock market fell -15% from recent highs. Thats a normal correction after a major stock market rebound that we had for 13 months. The correction though has left many stocks now cheap ahead of earnings in July. Companies have started giving guidance ahead of earnings and CAT already has given good guidance this morning.
The Euro and Greek problems will be mostly out of focus now as majority of politicians will be leaving on summer break soon. The Euro problems will rise again in mid to late August again when the austerity measures of Greece will be judged, if they are judged as not satisfactory then a Greek default will be the outcome at the end of August.
The Chinese currency being unpegged is great news because it means the market will judge which way the currency goes and the market today says its down -1/4% against USA dollar, so much for the Bears hopes yesterday that it would rise dramatically against the US Dollar.
Let the Summer Rally Begin.