by Graham Summers, Gains Pains & Capital:
After this weekend, the summer session for the markets will be winding down. August historically is a listless time for the markets. In the US, Congress is closed so there are fewer major announcements regarding public policy.
In Europe entire companies and Governments will close down for a month as the continent goes on vacation. Traders take advantage of the lull in action to hit the Hamptons. The end result is a quiet time for the markets with low volume.
Adding to the doldrums this year is the fact that Bernanke didn’t attend the Fed’s Jackson Hole meeting, so there were no new major announcements from the Fed this month. On top of this, Angela Merkel is seeking real election in Germany in September, so there has been a concentrated effort to keep things “quiet” over there.
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