So many bullish items today:
1) It was breakout action after a 8 day consolidation on the S&P500, so the moves may be violent.
2) Banks getting a boost from WSJ story about how feds will soon allow dividend increases. How high can the rally go if the banks break out from a 6 month long base?
3) It was rumored next week Wednesday, we will have an announcement on QE II buying and that may be a daily operation.
4) We also have rumor that Obama is working with both parties on extending the Bush Tax Cuts.
5) Ben Bernanke made it quite clear in an editorial today in the Washington Post that the Fed wants to inflate the stock market and keep interest rates near zero to creates a virtuous cycle that hopefully ignites economic growth.
6) We had a big point gain on great breadth and increased volume. So this will set the lagging breadth oscillators going.
7) If the job numbers are bad, the Fed is going to keep printing money. If the numbers are good, then that means the economy is improving.
Mondays had being up 90+% of the time in the past 3 ½ month and plus POMO
9) Monday and Fridays had being FED’s favorite manipulation days?
A few Bearish thoughts:
1) A move above April high for SPY and Above 2007 high on the NASDAQ on a gap up rally base on a good job number may invite the faders.
2) The SPY had being up 6 days in a row with 4 straight gap ups. Approaching overbought.
It’s probably safer to buy a pullback base on all the reasons above, but on a hot open its tempting to try a fade trade for a few hours.
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