The past three days have been frustrating for me. Simply put, I haven't been in the position to capitalize on the 2-3day rally.
Not looking for pity. I was bullish on this market since 1200. My point to highlight my frustration is that, if I am feeling this way, after two days, can you imagine how a money manager who has been watching since early december is feeling?
A couple of days ago, I highlighted why I was cautious, but expected a potential blowout top toward 1340-1350. After a brief pull back, the current push higher is not because of blind buying. There was significant economic data that takes recessions completely off the table.
First we got the global PMIs that were pretty good. Especially when digging into the EU PMIs and factoring in the ECB support. Then we got the US jobs number today.
Taking the above data, with a very inexpensive market, that offers higher dividend yields to the treasury, we have the potential of a powerful reaction. I dare say it, but we may find ourselves pushing toward a normal market multiple. That basically means the market has some serious appreciation to do.
The economic data makes me reconsider the technical conditions we are seeing. Usually with such over bought conditions, there is justification to be cautious. But with the new data in play, it might mean the markets are approaching a new trading range, with the low/mid 1300 level being the new low end.
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