Thursday, October 8, 2009

Only 521,000 New Claims

WHAT????!!! And this is good news? Stocks appear to continue to rise on the news and the S&P 500 appears set to open around the 1063 level. But is this enough??

Last week we advised to be prepared for the "three week test of the high." It is coming in right on queue but will the market break through? That is the question. Each time we have seen an indication of a top, the market continued to keep rolling on as trillions of dollars continue to find a home with a better yield than US Treasuries. Should the SPX not close above the 1068 level tomorrow, expect the market to begin backing down. The three week test of the high generally marks the beginning of significant intermediate term moves.

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