June 10, 2013
Weekly Market Outlook
By Keith Schneider
The market had one of its strongest days on Friday after the much awaited jobs report came in showing modest growth. After the swoon of the past two weeks the market certainly was ripe for a relief rally. What is most interesting is that the market was able to put in such a strong performance while rates also rose. It appears Bernanke has the perfect formula. His tightrope act is based on modest growth, which allows the monetary IV drip to stay open and reduce the flow slowly. Too much growth would not support continuing any IV drip and that could unhinge the markets. Too little growth and the stock market could crater on overvaluation worries. Overall the evidence points to continued strength, with market internals oversold on a good test of the 50 day moving average which keeps the bull trend intact. However, Friday’s strength remains to be verified, as the bounce could have been mostly technical and very short term in nature. If this market has the legs to take out the recent highs, it is open field running.
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