030907 Today (mid-day) and Next Week
Today (mid-day)
Today’s payroll number is still a “mixed bag”: It’s a little bit bullish, if you wear bull’s glass, and a little bearish if you wear bear’s glass. However, neither of the two glasses is the fashion of the day: There is no “hardcore” data point in the number, either for bulls or bears.
That said, there is not much ammunition either for bulls or bears to start the day: bull’s traders pushed up Dow as much as to 12330 shortly after opening, but 20 points short of 12350 I expected, the highest intra-day high since Feb 28.
Bear’s traders did better today than yesterday, pushing Dow down as much as to 12251, shortly after 10:00Et, cleanly closed today’s opening gap, and 9 points down from yesterday’s close.
I guess today’s high of 12330 and low of 12251 have all been well identified and tested, and I closed all my long and short trades for now.
Next week
I guess bears would continue to close their positions and take profits in the next few days, if they think there is no more “recession skeleton” to be found in the economic data closet for the near future, and therefore the bottom of the current correction has been probably found at 12040, the lowest intra-day low on March 2 and March 5.
As bears retreat, bulls will come along. Although today may not be a follow-through rally confirmation as defined by IBD, it is probably going to be another rally attempt. If we are still in a bull market, the correction can’t last two long; momentum will be slowly built up for bulls. I guess bulls will challenge 12350 the coming Monday.
“Sunny Orient, Rainy Occident”
I still think the catalyst for the current correction came more from Asian market and yen’s rally than from US economic data, even though it may be a combination of both. So, for next week, whether we are going to have a sunny Occident depends at least partially on whether we are going to have a sunny Orient. Even today, I think bull’s modest performance is kind of related to less sunny Orient last night.
We will see if we can get one sunny Orient the coming Sunday night.
From marketreflections.com:
Financial market is a dark universe full of uncertainties, with both beauty and beast floating around. Rationality is the small candle we have, when it dims, emotion comes in.
Fundamental analysis: it is not about what and how you think, it is all about what and how market thinks.
Technical analysis: In short term, there are no fundamentals; in long term, we are all going to die.
