Exposing Ideas to the Envelope of Serendipity



Contact moo at: bluechipbulldog@gmail.com



Friday, September 3, 2010

Employment Data Boosts Futures

Better than expected (feared) jobs data hitting the wires in the pre-market has spiked the futures sharply higher and has the market set for another gap-up open. $SPX 1100 has been an area of well-defined resistance, followed by the 1129 zone near August highs. I've been commenting a lot lately on the bullish action of leading stocks and the positive basing action I'm seeing across many sectors. The volatile trading range we've been stuck in since May still appears to me to be one very large basing pattern, and indeed, increasing numbers of bullish patterns firming up in longer-term charts argue for higher prices. I suspect, as I've been saying for awhile now, that the serious mistake made by many, perhaps most, will be to be too bearish. Sentiment had become just about as overwhelmingly negative as I've seen it, with cardinal climaxes, Hindenburg Omens, and apocalyptic calls of crisis dominating the blogosphere buzz and many financial publication headlines. Extreme pessimism, as we know (or should know), tends to be very bullish. Many a bull charged out of just such conditions. That said, the indices still have much work to do, and I still suspect we will see a pull-back and some consolidation soon, which should ultimately be very constructive. And I don't want to diminish the task bulls face in overcoming the summer highs, which could be daunting. Overall, though, patterns are turning bullish, market and stock action are turning bullish, breadth is showing flickers of improvement but needs to monitored, and a majority of investors are bearish on the market. Sounds like a recipe for a rally to me.


Trade well.

--Brinkley
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