Our pattern of gapping and closing in the opposite direction of the prior day’s close continued today. This time the bulls finally had some positive news and seasonality to push the S&P 500 through the 1200 level. Volume declined quite a bit due to a string of bad news that hit before the close yesterday.
Rumor that the U.S. would provide aid for the European bailout, further helped the bulls today. The USA economic figures seem to be improving and could that lead to a better jobs number this Friday? With a better economy comes higher interest rate and a continue rush to leave the bond market. Will the new money find its way into equities and give us a new 2010 high by next week? Santa Claus coming to town? We are going to have some news overnight out of Europe as bailout discussions continue, so the risk is there. But there will also be many under invested fund managers chasing this rally and may provide support on weakness, so odds may favor some back and filling action tomorrow especially on a hot open.
Item of Interest:
I checked with my friend who works at a supplier of electronic parts. “Business has picked up alot especially during now when it’s supposed to be slow. ” His exact quote from the email.
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