Friday, April 9, 2010

Markets Bearing Down on 6th Straight Up Week as Dow 11,000 Beckons

Barring an atypical selloff in the closing hours, US markets are poised for their 6th straight up week, and 7th positive week out of 8. 

Since almost every Monday the past 8 months has been up, the market now has a head start every week since it's really a 4 day week, with Monday being up 90%+ of the time.  Hence those other 4 days need to be negative simply to offset Magical Mondays.   This pattern of course leads giddy buyers to pile in late on Fridays knowing they are bulletproof.   This reminds me a lot of the "3:30 PM" effect we saw much of 2009 ... when, almost without fail, the market would stage a rally in the closing 30 minutes of the day - regardless of the actiont the first 6 hours.

(once again, I'll say what used to happen is when EVERYONE notices a pattern the market would reverse and quash those who became complacent playing it... this seems to no longer be true in the new paradigm market)

Greece has been an issue all week, with spreads on debt blowing out to levels higher than BEFORE the IMF/EU "we have a bailout planned, but just don't have specifics"... with the Athens market flat all day and then exploding higher 3% in the closing 15 minutes of the day it looks like Bailout Planet might occur this weekend.  Which of course will lead to a positive market Monday..... it's all circular.

All we are waiting on is a silly psychological level of Dow 11,000... upward and onward to all time highs.  But in such a slow fashion there are not even index trades to be had.

There really is not much more to discuss with the market - all (tiny) dips, even if they last 30 minutes, must be bought... selloffs are to be 0.3% or less in nature although once in a while we'll allow 0.5%, Mondays are up at a 90% rate, which means Fridays are now to be almost always up as traders pile in for the "can't miss" trade.  Greece will be taken care of this weekend - we promise.  And if not, ignore it anyhow because it's old news.

Updates: 6 day moving average 1185ish.  Distance from gaps - 5.1% from S&P 1124, 9.5% from S&P 1078.  Please note we have not had a 10% correction the entire rally since March 2009; 9% has been the max.


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