- The US data during the trading session on Tuesday had Wall Street excited at the prospects of a weak economy.
- After all, stocks now have more to do with monetary flows in the do with the underlying economy, and that has been the case since the Great Financial Crisis.
- Wall Street is looking for handouts and cheap money, and that of course has inflows into the technology stocks as they look for growth.
The size of the candlestick for the trading session on Tuesday is rather impressive, and if we do break above the 15,400 level, then it’s possible that the market could go looking to the 15,750 level. All things being equal, the market will continue to show a lot of bullish pressure, but we have to worry about the Non-Farm Payroll announcement on Friday, which will have a major influence as well. At this point, it’s obvious that the market will more likely than not offer some type of pullback, and therefore I think value hunters will come back into the picture to take advantage of this. The 50-day EMA hangs around the 15,000 level, which is an area that will attract a lot of attention not only due to the moving average but also the psychology of the big figure.
I Have no Interest in Shorting This Market
Underneath, the 14,600 level is the “floor in the market” at the moment. At this juncture, it’s likely that we will continue to see plenty of reasons to go higher, whether they are real or not. Wall Street loves a good narrative, and I suspect that now that we have seen lower economic numbers in the form of the Consumer Confidence report and the JOLTS Jobs Openings in America, I think there will be plenty of people out there shouting that “Jerome Powell cannot continue to keep monetary policy type.
I have no interest in shorting this market right now, as it’s obvious that there is more upward pressure than anything else and I do think eventually we try to break out to the upside. The question at this point is whether or not it is going to be right away, or if it is something that’s going to take a little bit of time? Either way, a little bit of money management probably goes a long way here.
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