There isn't much going on. The market is getting duller, although we did see a little pullback yesterday. It is a tough market to predict now. We have rallied for almost 4 weeks so this rally is getting long in the tooth, but at the same time, I am not seeing investors "buying in" to the rally. There are lots of skeptics. It doesn't mean that we keep going higher. Because we didn't have investors buying in in late December and yet we took a deep dive in January.
It seems like the crowd is expecting the market to top anyday now and then plummet back down to 1800. Not saying that the crowd is wrong, because they were absolutely right predicting the January selloff. But I usually do not like to bet on the same side as the crowd. My view on the market is similar to what the crowd thinks, but I am not acting on my view yet because of the lack of optimism. We had a one day pullback yesterday and the bears came roaring out of their caves.
I am expecting Draghi to bring out the bazooka tomorrow, I am not sure what the reaction will be, but I am leaning towards a bullish reaction. He made the mistake of overpromising and under delivering in December, and I think he learned his lesson. Look for him to do what it takes to please the market. It should just be a short term pop, but enough to squeeze some stubborn bears. After all, this market seems to get the most aggressive buying from short covering than from actual longs adding positions.
Leaning bullish for the rest of the week but with low to medium conviction.
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