The Final Bout...

The epic battle between the bulls and the bears have gone on for weeks now without a clear resolution. Even last Friday's one day bear victory due to GE's disappointing earnings does not ensure the bear's success. I think this is going to be the week that marks the final bout between the bulls and the bears due to the number of heavy weight releases coming forth this week (see economic calendar). The CPI, Housing Stars, Jobless Claims as well as the Leading Indicators are all going to be moving the market. If they turn out lousy, the bears will win and if they turn out great, the bulls will win. We are now at a period of time where investor expectations are building up to upside and any signs of a real recovery will start an unstoppable self-reinforcing process called a rally. If the numbers still does not catch up this week, those expectations may turn and start a self-defeating process feeding on those numbers. Stock Options expiration this Friday is definitely going to add some volatility to the market as well. The rounded bottom reversal on the Dow weekly chart that I presented last weekend (please go see it again) remains intact suggesting that a turn around remains a high possibility. Happy trading ahead!