February 21, 2011

Nasdaq & ICE and Frankfurt Want NYSE

The whole deal being talked about earlier this week over the proposed take-over of the New York Stock Exchange by a Frankfort Exchange Operator has Continued to Add to the Story. Over the Weekend, Tucked Several Pages Deep in the Saturday NY Times Edition, Was an Article About the NASDAQ - OMX Also Showing an Interest in Acquisition of the NYSE. There is a clause in a signed contract which imposes a penalty of over $300 million dollars on the NYSE Group if they back out of talks with the Frankfort Operator. It has been reported that a completed deal would create a Mega Powerhouse exchange serving all along the Atlantic. Now that Nasdaq has shown an interest the stakes have risen for what type of deal NYSE might get in the end. Here's the article that just came out: Nasdaq OMX and NYSE Talk.

I have to admit that I was surprised and pleased to hear Nasdaq OMX groups interest in enhancing their services but also keeping the NYSE American owned. I know the penalty for backing out is stiff but in the long run, that will be made up many times over again. The stock market has been rising the past couple months. I saw in the news papers where all three major US Indexes were trending upward at what appeared to be 45 degree angles. I have learned over time and through experience, that a trader must not catch a stock first. Instead they must catch a movement and then use a stock to ride it. Of course the big challenge is determining when the declines are genuine corrections and when they signal falling prices ahead. As for now, the S&P 500 has been up three consecutive weeks. The moment was like a current that pushed prices up. I would expect oil prices to rise this week as the unrest in Libya and their 1.6 million per day of oil output may face challenges. As Africa's 4th largest oil exporter, Libya political strife, may play a role in the rise. China has been taking steps to curb their inflation and economic policies being put in place, provide incentive for domestic spending by Chinese consumers. As the Markets in china focus on domestic demand, the trade imbalance with the US should narrow in the months ahead. We are in an upward trending market, I don't see a slow down occurring this week.

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