The markets rallied today to close positive for the year. It's very typical to see big players push up the market on light volume holidays, especially Fridays. Now the headlines for investors can make them feel comfortable over the weekend; keep them invested. Good chance that selling will resume next week. The Nasdaq was much weaker in this rally, which is not a good thing. Tech is normally a leader. Also, copper was not leading, which can be a nice tell.
Looking at the trend model, there is a lot of uncertainity in the market. One can see this fundamentally through the huge gaps down by the Euro session followed by burst of rapid buying. This buying appears to be by some of the central banks and major market players to pump the market up. A lot of the run up this week was just caused by gunning a lot of the short's stops.
Also through the bullish/bearish trend model, one can see that commodities have been doing much better than the rest of the market. Crude oil and gold have continued to climb their way to their yearly highs. I believe I blogged or tweeted about their relative strength just about every day this week. Why are they doing better? A lot of investors are starting to price in another round of quantitative easing by the US Fed and the ECB. Quantitative easing is known for its inflation producing results, thus pushing commodities sensitive to such changes higher than the rest of the markets.
Still a lot of uncertainty out in the markets. Euro-zone risks can still provide a lot of shocks to the market. Be nimble out there.
Have a good weekend all!
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