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Volatility is back. After a few weeks of stability and a methodical uptrend in the markets, this week brought us, so far, back-to-back one hundred point moves in the DOW as investors contemplated the probability of the markets sustaining levels at or near the record highs set before the crash of 2008-09. Big media started paying attention to Europe again, an eventuality we've discussed for a couple of weeks now, and as a result some of this week's volatility has been due to reports of the still-lagging economic recovery over on that side of the Atlantic. Moving forward, such concerns are still likely to play a role in the overall market action and spark some continued volatility, but for the immediate future investors look to want to shake off the European worries and trade on the momentum of this quarter's earnings reports, which have been solid all season long.

Still, as the influx of cash into the markets seen in early January subsides - and the cautionary tales from Europe continue - many will look to prepare their portfolios for the possibility that a pullback will take shape. The warning sign will be, in my opinion, when the media outlets start harping on European worries, which has already started to happen...

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