Right now I think the graphic below best sums up what is happening out there on the market. LOL.
I love the picture of the bear with his party hat on, and his party blower in his pocket. haha. This is pretty much the reality of what is going on right now as the bulls are celebrating and drinking and partying through the night especially with the action that happened on Friday. It seems the bulls cannot get enough and will probably be partying into all hours of the night over the weekend ;-)
If you have a look at the S&P Daily chart in 2013, you will notice that the bulls have been relentless and sticking to the bears since the beginning of this year. We have been trading in a major upwards channel, and the last few weeks we have only had a few red days at most, and rallied from the 1550 area all the way up to over 1600 today. We are close to a major resistance line and that is something to look out for, however we would not be surprised to see 1700 come by the end of the year. Yes! You did read that right That was not a typo, NO JOKE!
The S&P 500 Friday vaulted above the psychological 1600 level for the first time, after April's better-than-expected jobs report. The Dow broke through the major milestone of 15,000 for the first time though it closed below it. At the same time, bond yields that were testing the lows of the year just Thursday, jumped, taking the 10-year yield to 1.74 percent.
Everyone is talking about the economy improving but the market rallying is never based on that. They are totally dislocated. The previous resistance at the 1600 level could now become support, however we still need to be cautious as the market is heavily overbought and a rally is healthy, but not without some sort of a dip or sell off. So you need to keep that in the back of your mind.
Still the bulls are partying, but we are telling our subscribers, to tread carefully, and remember nothing goes up in a straight line.
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