The S&P 500 Index extending its rally throughout the session to end on a gain of 8.5 points, closed at 1184.71. A big rebound by bank stocks on the upbeat report from Citigroup helped drive the broader market higher Monday.
While it is likely that the current rally has further to go, however, there are some factors that warn us to be cautious. I believe the probability of a pullback is rising. One of the main catalysts for strength of the markets lately has been the consistent downtrend in the U.S. Dollar Index. I think a counter-trend rally in the dollar is approaching and believe this will take away some fuel from the rally.
Tech has been holding the market up as financials fell last week. With tech showing weakness, we could be getting ready for a bigger correction. Nevertheless, Charts are still not showing a topping pattern on the SPY but I will look for that closely to see whether it’s time to look at short opportunities again.
No comments:
Post a Comment