The market has been showing strength yesterday on the upside break-out.
First, yesterday was the second day in a row with 80% up volume. Second, the last hour of trading was strong and closing at the high of the day. Third, it was financials that led the market higher, along with materials, while defensives have been lagging.
I will establish long positions today if we get a pull back towards support at 1300 (red line above) or next week on a pull back around the employment report. The market may anticipate some weakness for the NFP number and also the ECB is expected to serve the markets another rate hike.
Meanwhile the put/call ratio is suggesting any early correction is a buy today, since with all the strong market in the last two days, the ratio has moved down on my chart, indicating some stubborn bears holding to their positions. As soon as they bailout, which may happen even today, the market is ready to correct a little more.
2 comments:
"some stubborn bears "...LOL! I am one of them.
Tony
yes, this rally has been too fast for me too. i was ready to go long even with smaller position at first but the it just slipped through my fingers
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