A few days back I mentioned about “show me the volume“; It was no different yesterday in spite of such a huge market rally. And even after what might look like a resumption of the bullish trend, it was no way closer to a 90% upside day for NYSE. So handle with care. Pete of option-1 suggests not to buy into this rally. We’ll see if markets can follow through yesterday’s gains to push it to higher levels. Be on the lookout for volumes.
The coppock curve has stopped declining, for the time being, and now flattening to turning positive. This is has been one of the most accurate indicators to predict market’s turn but do note that this is a lagging indicator and often recovery might have taken place before it gives a signal. But more often there is room for further play once this gives a signal.
The US economy will begin to expand next quarter, according to 74 percent of economists in a National Association for Business Economics survey. Key Highlights-
- The NABE forecast panel expects a further decline in economic activity during the second quarter, making for the most severe economic contraction in over half a century.
- The near-term weakness is largely due to a sharp retrenchment in business investment.
- Rising government spending will provide vital support to the economy, as the only major expenditure area posting positive growth in 2009.
- A modest second-half rebound in real GDP is still expected.
- Growth in 2010 is slated for a return to near its historical trend, with real GDP rising 2.7% on a fourth quarter- to-fourth quarter basis.
- Labor productivity remains impressive and is expected to improve.
Government Motors (GM) is about to file for bankruptcy. GM bondholders had until midnight to trade $27 billion in debt for a 10-percent ownership stake in the reorganized company that U.S. officials have said could emerge from a quick trip through bankruptcy court. Markets hardly seem to bother with the “potential” news. Gone are the days when a move in GM was a move for the America, or at least for the stock markets.
Monsanto (MON) is down almost 4% in pre-market. It may find support at around $80. It may influence other agrochemical stocks i.e. POT, AGU, etc. Watch-out for weakness as well as weakness or strength in US$.
Trade carefully, also be aware of window dressing,
Profitable Trading, OP