The market is loving the news over the weekend, with the Syria deal with Russia, and then Summers withdrawing. I don't view either bit of news as game changers, because the market was already over Syria last week and Summers wasn't going to do anything different than Yellen, since he's bought and paid for by Wall Street, while Yellen just likes printing money.
After a rally from 1625 to 1695 over the past 2 weeks, a 1% gap up on good news is usually an intraday short opportunity. Especially with the FOMC meeting coming up on Wedneday, I cannot imagine significant amounts of capital will want to get long at these levels.
The buying that you are seeing in premarket is mostly shorts covering their positions to cut their losses. And there was quite a bit of shorting last week on the premise that the market has gone up too far too fast ahead of Fed tapering.
Looking beyond the next couple of days, if we get the expected tiny taper and the relief rally accompanying it, we should be around ES 1720, which would provide an excellent short entry point for a move back down ahead of the debt ceiling budget talks in the coming weeks.
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1 comment:
Thank you. Keep the good work!
My view is also the same as yours. I think market is not TOP yet since everybody is talking about the top now.
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