It’s not perfect and nothing really is in this market, but the upside down head and shoulders could have been completed today. The market rallied right on cue today. We had a jobs report this morning that stunk. We all knew it would but I mentioned on my radio show this morning that the market had a 67% chance of rallying today. How did I get that figure? Here were the 3 likely scenarios I laid out:
- Jobs number worse than expected, market falls
- Jobs number better than expected, market rallies hard
- Jobs number worse than expected, market rallies anyways
Well. We got number 3. The data was very ugly but the market immediately ignored it and we went up. The Dow finished up about 250 points after trying to sell off late in the day. It wasn’t the strongest day in the world. However, the market ignored bad news. That’s a good sign. Remember, it didn’t ignore bad news the last two days. It sold it off hard. Did we rally because we had this technical pattern? Did we rally because people are optimistic Obama’s economic team can fix some of these problems? Did we rally because the market has already priced in bad news from the economy? I’m not sure the reason but it was right on cue.
Ending the week with a nice gain was the just the prescription for a nice weekend. We had a nice rally followed by profit taking and a rally that prevented us from going to the old lows (at least for now).
I bought some mid cap stocks today in a pretty aggressive way in the morning and that may turn out to be a quick trade. In this environment, sometimes you have to trade quicker than we usually do but that’s what the market is giving us.
I want to say thank you to everyone who came to our strategy session in Houston last night. I enjoyed meeting many of you. It was a very crowded event with standing room only. I think everyone there got some good information about what we see going forward and the opportunities that are in front of us right now. The event was so full, that we have the overflow strategy session Tuesday night. It’s a free event with Daniel Frishberg and myself. But, it will fill up quickly. If you want to register, go to www.bizradio.com or call 1-8778-BIZRADIO.
Have a nice weekend.
