traderchild
Junior member
- Messages
- 15
- Likes
- 1
The week’s coming to an end, and the broader market has been on an absolute tear. The main indices are making record closes left and right, with the Dow adding 1000 points in just 17 days. This is no doubt a liquidity driven rally. After all, the fundamentals haven’t changed at all.
I currently have two conflicting thoughts on the roaring price action:
1. This rally is driven by momentum and could keel over relatively easily. Though I much enjoyed Ben Bernanke taking our clueless legislative representatives to school while adding fuel to the markets, caution is needed. One string of bad earnings reports could quickly dampen the mood.
2. The fact that the markets are making all-time highs isn’t necessarily a sell signal. Bears have been calling peaks at every sign of a minor retracement…and every time they’ve gotten crushed. Should we receive good earnings releases and continued positive sentiment there might be even more upside in the short-term.
Other than the approach of the heart of earnings season, there aren’t really clues as to where the market could turn next week. The coming week’s primary market movers (housing, durable goods, jobless claims, etc.) should only indicate trend continuations.
I’m expecting something of a flat line next week with few catalysts for a large turn-around on the horizon. However, markets don’t just camp out at all-time highs for long. I would like the uptrend to continue. But other than the Fed’s balance sheet, I don’t see the elements needed for a sustained high-percentage advance.
If you enjoyed my take on the makrets, check out and subscribe to my page:
Traderchild | Market Commentary and Actionable Analysis
I currently have two conflicting thoughts on the roaring price action:
1. This rally is driven by momentum and could keel over relatively easily. Though I much enjoyed Ben Bernanke taking our clueless legislative representatives to school while adding fuel to the markets, caution is needed. One string of bad earnings reports could quickly dampen the mood.
2. The fact that the markets are making all-time highs isn’t necessarily a sell signal. Bears have been calling peaks at every sign of a minor retracement…and every time they’ve gotten crushed. Should we receive good earnings releases and continued positive sentiment there might be even more upside in the short-term.
Other than the approach of the heart of earnings season, there aren’t really clues as to where the market could turn next week. The coming week’s primary market movers (housing, durable goods, jobless claims, etc.) should only indicate trend continuations.
I’m expecting something of a flat line next week with few catalysts for a large turn-around on the horizon. However, markets don’t just camp out at all-time highs for long. I would like the uptrend to continue. But other than the Fed’s balance sheet, I don’t see the elements needed for a sustained high-percentage advance.
If you enjoyed my take on the makrets, check out and subscribe to my page:
Traderchild | Market Commentary and Actionable Analysis
