Markets have broken above resistances, rallying 8-9% in 3 trading days, with light volume trading to lure in side line cash before the Jan earning reports. DOW has already traded above 9000 target; since it has only 30 stocks to manipulate, it is easy to trade up. DOW next target is to 10500 +/-. SPX 1100 and Nas 2000, respective targets along with DOW 10500 +/-. The breakout from the recent trading range targets are DOW 9700, SPX 1000, and NAS 1800.
Intradays are overbought and showing -D. With starting a war in Gaza, oil price has spiked along with Obama reckless spending spree with detrimental national debt as he does not lay out his plan as to how he is going to reduce exploding national debt. Any irresponsible person can go on with spending spree with a hopeful themes such as alternative energy and rebuilding old infrastructure.
Markets will be trading with normal volume after the 2 week holiday light volume trading. With traders coming back from holiday vacation, we will see whether markets will quickly correct overbought condition, then, resume rally going into Jan earning reports.
The three day rally in light trading volume certainly provides rally hope; but, we need to see during the intraday consolidation period during the next week.
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