Heavyweight Week Ahead!

The first new week of every month are always heavy and this week is even more so with the GDP and FOMC announcement coming up on Wednesday in addition to the monthly ISM index on Friday (see stock market calendar).

All of these are coinciding with the first weekly retreat on the Dow since its 6 weeks rally begun. In fact, both the S&P500 and the Dow has retreated right on their 30WMA, which makes a strong pullback very very probable. So far, that inevitable pullback has yet to happen. I would see it happening this week as consensus calls for a higher GDP number of -5%. This is quite an ambitious call and would only cause profit taking if it really work out or sell-off if it is not met. I am of the opinion that we have seen the worst this crash has to offer but I would not see the market go much higher without a significant pullback.