Analysis:
Yesterday's Analysis predicted that "the Initial Jobless Claims will confirm the continued downward trend in the four-week-average Initial Jobless Claims," and that "the market will rise above 1,210." Today the Initial Jobless Claims at 436,000 confirmed the downward trend, and the market rose above 1,210. On Nov. 26 the Analysis predicted that "the longer the market is held below 1,200, the bolder the Bears will become, and the longer they will refuse to admit to being wrong; thus, the more violent the eventual short-covering rally will become." The market's bullish run in the last two days has validated the prediction, although not all Bears have thrown in the towel, leaving an additional room for the market to rally.
Looking ahead to tomorrow, the payroll increase will be at least 155,000 while the unemployment rate will surprisingly drop to 9.5% or lower. The ISM Non-manufacturing Index will increase to at least 55.5. As a result, the market will rise towards 1,230 and settle below 1,228.
Strategy:
Hold long at 1,197
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