A Critical Juncture For Mr. Market

Last week, economic data indicated some progress on the unemployment crisis and the broader economic recovery underway in the United States.

Welcome to a new week of trading…  The last full week of trading before holiday schedules begin to cut into market hours and liquidity…

While it is the labor day holiday in most of the world, and as a result volumes will be more subdued than ever (meaning at least a 10 point algorithmic levitation on no volume for the S&P), let's not forget that Benny and the Inkjets are doing their best to make everyone into a professional day trader (the only "wealth effect" transmission mechanism left) so markets being open seems somewhat counterproductive. That said, futures are already up on the usual atrocious economic data out of Asia this time.

Forget all of the talk about the rise of China and the shift of economic power from West to East. The U.S. economy remains the largest and most important in the world, and what happens in America still determines what happens to the global economy. No wonder, then, that investors from Hong Kong to London have become fixated on the looming “fiscal cliff” facing the U.S. government.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.Investors last week faced a tug of war between signs of an improving U.S. economy and lingering concerns about Europe’s debt malaise. These worries moved to center stage on Friday when Standard & Poor’s downgraded the credit ratings of France, Austria, Italy, Spain, Portugal and four other European countries.

Brooks McFeely submits:If history is any indicator, and we all know it is, traders should take sides with the price momentum after tonight's reaction to earnings by JDS Uniphase (JDSU). The company is due to report its Q2 results after the bell tonight, and analysts polled by Thomson Reuters are expecting the company to post revenue of $439 million and a profit of $0.19 per share.