Today the S&P 500 squeaked to the highest level in 17 months, finishing the day at 1150.24. The previous high was set on January 19th at 1150.23. In late January and early February the market slipped by more than eight percent as investor took profits and worries about Greece and the debt crisis took center stage. For a while it seemed that a new correction may have been starting, but at least for now it seems that was just a temporary bump in the road to the recovery.

Over the last few weeks I have heard a lot of complaints about the volume in the market being lighter than most people would wish. While I understand those concerns, I think the process the market has been going through is a very normal one. After a huge run last year many investors took to the sidelines in late January, but over the last few weeks the market seems to not want to go lower. A television commentator wisely called what has happened the last few weeks a “melt up of the market.” The market hasn’t been setting any records on speed of a gain, rather it has just slowly moved higher as investors digest the current news.

After a great run like the market had over the past several months I think it is a good step to see a period of market digestion, and it certainly is encouraging that during that time it seems that even negative news hasn’t been that much of a drag on the stock market. The slow churning of the market right now might be boring and difficult for some traders, but the truth is it is a very healthy process for the long run. So long as the market holds it own during the quiet period I think the  signs are positive for the next big move in the market.

The stock market is rising nicely today after the February non farm payrolls report showed that the economy lost just 36,000 jobs in February, much less than the 70,000 or so analysts had expected to be lost. Severe weather throughout February gave the month a very bad backdrop, especially for groups such as retailers and those most exposed to the consumer. The weather would also hurt construction hiring since many jobs were not able to be completed due to the inclement weather during the month. December’s number was revised to just 109,000 jobs lost, from an initial estimate of 150,000. In January there were 26,000 jobs lost. The unemployment rate held steady at 9.7%.

The breakdown of jobs gained or lost does indeed show the hardest hit area was construction, which shed 62,000 in the month of February. Unemployment in the construction is estimated at a stunning 27.1%. Retail employment held steady after gaining 40,000 jobs in January. On the encouraging side of things, 47,500 temporary workers were added in the month. Private business services, often seen as a barometer for the jobs market overall, added 51,000 jobs in the month of February.

Clearly the jobs market is on the mend from where it was several months ago. Right now we are talking about nearly break-even jobs gained and lost, which is a big improvement over 600,000 jobs being lost per month. There definitely needs to be more improvement and it will be interesting to see what the spring brings for the job market in the United States. Temporary workers being picked up tells me that employers are starting to edge back onto the side of hiring, but they are doing so cautiously. March’s employment report has a chance to be our first month of gains in quite some time, so stay tuned and see if the economy can get back on the path of creating jobs!

Mergers and acquisition activity, often called M&A, can be a great sign of the economic times. When the economy is in the dumps companies don’t want to open up their books and spend, so activity is slow. As companies become more confident about the economic environment they usually start to look for business opportunities that can help them grow. Both yesterday and today there has been a huge increase in the M&A activity on Wall Street, and there is no doubt that investors are taking notice.

Yesterday it was the Prudential and AIG deal that took center stage and for good reason. Prudential purchased the Asian operations of AIG for a whopping $35.5 billion. That certainly doesn’t sound like something that a company would do when they believe the global economy is in shambles. The simple fact that AIG was involved in this transaction also lifted the spirit of investors, since AIG is one of the main culprits for this financial crisis that has occurred in the past couple of years.

Today we have word that the fertilizer industry is ripe for M&A activity between major players. This is another space where companies with cash on hand appear willing to wheel and deal in an improved economic environment.

As individual investors the increase in mergers and acquisitions should definitely encourage you. Large companies that are stocked full of cash are often very careful with this cash, but when they start opening up their balance sheet and making deals, it is a true sign of increased optimism. If large companies with a stockpile of cash are more optimistic about the future of the economy then that makes me feel more confident about the direction we may be heading.

As more cash is spent and businesses take a leap of faith, the end result should be a positive one for the stock market and consumers as a whole!

Little bit of good news is pushing up the market today. Commerce Department said that the personal income has gone up six straight months and spending has increased four straight times. Consumers’ personal spending rose by 0.5 percent in January, slightly better than expected. But incomes edged up only 0.1 percent, significantly lower than the 0.4 percent gain that economists had expected. Consumer spending is closely watched because it accounts for 70 percent of total economic activity.

On the inflation side core price index (CPI) for personal consumption expenditures, which excludes volatile food and energy, rose 1.4% compared to January 2009. CPI is slightly decreased compared to December last year. It was 1.5% in December 2009. This means that prices are in check and inflation is not a big danger yet.

I keep talking about stop loss whenever I get an opportunity. I think stop loss is one of the important strategies you will need to follow to become a successful trader or investor. Stop loss is the strategy where you can define the dollar value at which you want to sell the stock when it keeps going down. If you buy a stock at $100 and willing to take 5% loss if things go south, you can place the stop loss order for $95. If the stock trades at or below $95, your stocks will be sold. This is the simple definition. You can place a stop loss order to sell the stock either at market or at a given limit price.

It’s hard to close a position at loss. But, think about how much more you will lose if the stock keeps going down. Almost everyone gets emotionally involved when they invest in the market. Although the common wisdom dictates to keep the emotions out of the market, it’s hard to do so. Stop loss will keep your emotions out of trading or investing.

Case in point. Few weeks ago, I had a position in SWM (Schweitzer-Mauduit International). I opened the position when the stock was at $80 and placed the stop loss at $76. As you can see from the chart below, I got stopped when the stock kept going down. It was annoying when you see a stock failed you. Few weeks later, stock plunged to $47. It’s going to take very long time for this stock to come back $80 or even $76.

Remember: Losing $5 is better than losing $45.

Investing your money is a vitally important step to reaching your financial goals. When you set financial goals you certainly have to make your goals realistic and not off the wall or not attainable. The same thing should be done when you set your investment goals. Many people look at the potential surrounding certain investments and decide that they will achieve that highest result themselves, when that is not a realistic expectation at all.

In order to understand what you are doing when you invest you should first understand the definition of investing. Investing is the act of committing money or capital to something with an expectation of obtaining a profit or additional income over time. Basically, investing is making your money work for you and your family’s future. Being wise with your investing throughout your life can really help set up your future and make things a lot easier for you and your entire family.

Realize that when you invest your money there will always be a trade off of some kind. If you are looking for the highest returns possible you will also have to deal with a much higher risk level. At the same time if you would like to get into an investment that has little or no risk you should also understand that your returns won’t be too terribly high. Most people should balance out their portfolio with some amount of risk, but not too much.

Though the stock market and other asset classes can go through great stretches where you may earn 25% or more in a single year, never start believing that will be the norm. The fact is in finance everything works in cycles and when one asset does well another will be doing poorly. Over time you need to realize that even the best of investments can’t earn a ridiculously high amount. Keep those expectations in check and you’ll have a much healthier investment portfolio.

Today the stock market is roaring higher as reports of a possible bailout of the debt-rattled Greek financial system spearheaded a wave of buying on Wall Street. Reports are that Germany is looking into helping out Greece by developing a rescue plan that will be aimed at rebuilding both the Greek system and the slumping Euro. Certainly the whole Euro zone is starting to feel some heat of late because of the huge drop in the Euro since December.

Increasingly of late there has been talk of a European debt crisis because of the terrible situation that Greece is in. It seems the whispers we are starting to hear are that other countries are starting to realize they can’t afford to have Greece in such a bad position and a European debt crisis is a very real possibility if action isn’t taken.

This affects the United States market and the overall global market because of the global economy in today’s world. The simple fact of the matter is there is no way that Europe could have a widespread debt crisis and it not hurt the American economy. The stock market in the United States has reacted very negatively of late to the news of the worsening situation in Greece, so today’s news is definitely a reprieve for the market.

While today’s rally is a nice one and it is news driven, the United States stock market will not be driven by this news in the long run. Rather it will be the productivity, or lack of it, from the American economy. It will be the employment picture, which is still rather cloudy right now. It will also be the consumer confidence and retail sales, which will indicate how the consumer is doing. Don’t get caught up in one day’s movement from a news event such as this one too much, because over time it will be the fundamentals of the economy that matter most.

In today’s economy each individual needs to pay even closer attention to their finances than normal. In a poor economy with over 10% unemployment one of the worst things that can happen to you is falling prey to a scam artist. Scam artists absolutely love this type of economy because people are more desperate and it is easier to lure them in. It really is sad that a bad economy brings them out in full force, but it is reality and every consumer needs to understand this. Right now probably the biggest scam out there that many consumers will fall for is the “Free Trial Offer” scam. Simply put these free trial offers aren’t at all what they seem to be on the surface, and it is very easy to lose a lot of money in a short amount of time with these scams.

Free trials aren’t always a bad thing, but in this era it is wise to ask extra questions and know exactly what you are getting into. How do free trial offer scams work? Often they will tell you that you can cancel at any point, when in reality you cannot cancel until after you have already been charged several times for the product or services. One of the best examples out there today is the Acai Berry Free Trial Scam. Acai Berry is all the rage right now when it comes to its nutritional value and its ability to help a person’s health. In fact there is a site solely dedicatedto letting you know about Acai Berry Scams and how to avoid them. Generally what happens with this scam is they get you signed up and get your credit card information, only to not allow you to cancel until later, and even when you try to cancel you are often placed on hold for hours at a time.

Free trial offers often aren’t what they seem, and in the end the one who ends up hurt is the individual who is scammed. Be very careful with free trial offers in this environment.

The stock market is trading much lower today, and the NASDAQ is leading the chargeto the downside. In a market that has become much more jittery over the past week, the technology stocks have been the biggest disappointment. No doubt the expectations were high for them coming into this earnings season, and for the most part they have failed to meet those high expectations. Today the major technology names that disappointed on the corporate earnings front were Motorola and Qualcomm. Both of these companies are in the mobile handset market and both had a pretty bleak outlook. Qualcomm missed their revenue number for this quarter, and is getting crushed by about 13% today.

Apple shares are also trading lower by about 4% on big volume today as the iPad has received some less than stellar reviews from some major names. In fact, a full article of the iPad flawshas circulated today. The market is starting to wonder if the release of the iPad is a little bit less of a boost to Apple than they initially thought.

Maybe investors just had hopes that were simply too high for the tech sector, but the NASDAQ is definitely starting to correct itself, losing 4% in the last 5 days. The overall market continues to be pulled down by uncertainty in Washington as well as around the world. There is no doubt that the market hates uncertainty, and the last few days is a great example of that. Right now investors are looking to find a clearer picture of what may be in the offing for the economy as well as the market. As I have said numerous times before the biggest deal right now is making sure the jobs picture improves so that the consumer gets healthier. It doesn’t have to be a perfect outlook to help the market right now, but we do need to get some clarity.

It’s not that there is any inverse relationship between these two. Consumer confidence index increased to 55.9 in January from a revised 53.6 in December. Economists had expected a reading of 54 for January. On the other hand, U.S. home prices fell in November. Home price indexes showed prices in 10 major metropolitan areas fell 4.5% in November from a year earlier, while the index for 20 major metropolitan areas dropped 5.3% on the year.

Few days ago, Commerce Department reported that existing-home sales plunged in December after three straight months of increases lifted by a government tax credit. Last week, the department said new home construction fell far more than expected in December.

Even though there is a good news about consumer confidence, Dow closed down 2 points after moving up more than 80 points for the day. This week is a tough week to trade because of so many events taking place. Interest-rate decision is coming up from the Federal Reserve on Wednesday. There is a speculation about whether Fed Chairman Ben Bernanke would be reconfirmed or not. Traders are also waiting for State of the Union Address by President Obama. If President talks about more laws to restrict banks’ abuse of the financial system, you will see more financial stocks going down.

Keep an eye on the market, but don’t get obsessed with it if you are not a day-trader.