Welcome back from the Easter long weekend!
In a surprising twist of events, the US market rebounded yesterday Monday even though last Friday's jobs report and yesterday's ISM services continue to disappoint. Why is that so? Economic indicators are like the stock market. They never go straight up or down. Even in a recovering market or a bullish market, economic indicators have down periods interspersed within longer periods of up periods. This period is clearly one of these down periods. Which is why knowing so, investors are actually looking to buy into the weakness, in anticipation for the next round of good economic indicators. Longer term bond yields rose as investors reallocated out of bonds into equities once again.
On the technical front, the SP-500 made yet another nice bullish pennant formation, looking poised for yet another bullish breakout. In fact, major index futures are already looking upwards at this point in time. Total equities put call ratio
also came back down in favor of call options
trading indicating a short term bullish outlook at last after spending most of last week in uncertain zone.
Nothing in the fundamentals or technicals suggest that this intermediate and primary bull trend is over. This is why me and my Master's Stock Options Picks subscribers
continue to buy into the weakness and profit. In fact, we took a nice 29% profit on Kellogg's Call Options last week (see how it was done here
) and we should be able to take profit on yet a couple of profitable positions this week.
For now, the market remains in short term Neutral trend within an intermediate and primary Bull trend.