Several weeks ago, I talked about some
of the things that have led this rally off
the March lows. These included banks,
technology, and the artificially low
interest rate environment. I also
talked about the fact that the banks
were no longer leading the markets
higher which leaves technology and
interest rates. Technology continues
to lead but keep an eye out if that
changes as that could be strike two.
On Friday, after a better than expected
unemployment number, the market spiked
initially higher but suddenly realized what
Fed chairman Bernanke had said the day
prior. In a nutshell, the Fed said interest
rates would begin to move higher with
improvement in the jobs picture. The
equity markets erased those early gains
in short order. This was just a small
taste, in my opinion, of what may
come when interest rates begin to
rise and those that borrowed against
the US dollar to purchase equities
and commodities such as gold are
forced to unwind those positions.
Keep your eyes on these remaining
legs for a heads up on the next
potential big move. Of course,
if our friend the Hindenburg Omen
comes calling it may be all over but
the crying.
Having said all that, watch tonight’s
video and find out what might trigger
and take us higher into the end of the year:
To Your Trading Success,
JM
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