The Epic Battle Continues...

The Bulls pushed the Bears back from their critical 12500 defense line today... ON RISING VOLUME! Rising volume shows that more and more investors are signing up to the bulls camp at last. So far this week, the Bulls and the Bears have been deadlocked for control, making a record 7 sideways days for the Dow. The market action today are attributed to the fact that both the bull camp and the bear camp recieved some additional ammunition, with the bulls having slightly more than the bears. On the Bear Camp, the widening trade gap widens unexpectedly and is expected to affect the future GDP numbers as exports is one of the most significant contributor to GDP lately due to the weak dollar. The real question is, is it enough to push GDP into negative territory in order to start an academic recession? On the Bull Camp, jobless claims collasped today, indicating a recovering job market. A recovering job market is definitely a leading indicator for a recovering economy. Oil and Gold also retreated today with gold clearly forming a distribution pattern which could lead lower. So, the Bulls did get more ammunition than the Bears today.

I am surprised that some readers are still asking me if the Dow will visit the Jan lows again today when that is now such a distant possibility that I don't bother to talk about it anymore. The bulls are clearly resilient and in control of the situation and nobody should want to bet against them. There are clearly only 2 choices for investors right now... 1, stay out of the market until this battle gets resolved, which of course means that you would have missed the big moves. 2, risk just a small portion of your money on the market using stock options so that you can capture the gains without excessive risk.

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