But here we are with a rebuff at the top. Actually, in the bigger picture I think this is more bullish for the market than bearish. Let me repeat that. Let’s look at the various highs. Market peaks have come in mostly on bad news. We had a series of peaks in February, first on the Egyptian news and then finally on Libya. In May we peaked on the Osama Bin Laden news. But the Osama news dissipated the euphoria really quick. What is the net result of all this? Whether its good news or bad news, here we are back at highs. Whatever euphoria we had working on Thursday was gone in the blink of an eye by Friday morning. I suspect we’ll continue to correct but I don’t see Thursday’s high as the top. There are too many other market conditions going on that do not support a big top right now. One of these is China, another is the oil trade and yet another is the US Dollar which is at important resistance. But that doesn’t mean we can’t have a serious shake of the trees this week. But in the bigger picture I have to take a step back, look at the sentiment and see that just below stock market highs all of the headlines about the economy and employment picture are horrendous again. If markets are supposed to top on euphoria and party hats, we are far from that.
After the jobs number came out, we started hearing stories once again about how lousy things are. I tend to look at the debt ceiling debate as a big wall of worry because I don’t see them not coming to some kind of a deal, even if they just kick the can down the road just a little bit.
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Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.
Lucas Wave International (https://www.lucaswaveinternational.com) provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.