Market Update — 08/31/2006

An uneventful week for the major markets has the indices sitting about right where they were when I wrote to you last week. Enticed by a last chance to enjoy the summer, traders and investors have brought the market to a crawl by keeping volumes pretty low.

Yesterday’s activity was interesting. The release of consumer confidence numbers revealed that consumer confidence slumped to the lowest levels this year. The market took a shallow dive. Later, the market recovered and ended slightly higher. This fluctuation can be linked to Fed remarks about interest rates that I will discuss later. As far as market trends, an S&P 500 that can hold 1310 would get my attention. Until then, I am not touching this market. We sit firmly at the top end of a trading range that stubbornly refuses to give way. For those of you holding positions, remember the importance a steadfast sell discipline.

September is a notoriously challenging month for investors. It dangles at the very end of the growth season (March to September), but investors are leery about what the markets might do in October. As a result, it is tough for the markets to stage a convincing rally at this time. We are heading into the time of year when stocks struggle. I want you to keep your eye firmly fixed on your portfolio, maintain tight sell stops, and pay close attention to me because I will get you through it.