Wednesday, October 7, 2009

Panic Buying?

This market caught a bid early this week as I anticipated and the commodity rally is the focal point of this recent move up. You cannot deny the dip buying we see each time we pullback in this market. the SPX closed above last thursday's down candle today and I believe we are setup to rally further into the weekend. The futures are already up big overnight off some dollar tankage and commodity strength. The banks are recovering nicely from last week as well and GS is leading the way as it should making new highs before it reports earnings next week. On top of this we have tech ripping and AAPL, GOOG, and AMZN are my favs.

The selloff last week from 1080 to 1020 has a fib extension of 127% up at 1097 and the 161% is 1118. I think these are very logical targets to expect in the coming weeks. The euro looks ready to take out the recent highs and this dollar weakness will fuel this move up in the commodities markets. Gold over 1050 and copper challenging 3 is a bullish sign.

Earnings are just around the corner and it could be the catalyst to propel this market into the 1100 area imo. You gotta believe that there could be a panic buying event to the upside since most guys wanted more of a 10% pullback to get into this market and they have not gotten it. The chase for performance is frustrating and they have little choice not to get in soon. Be warned. Trade safe.

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