"Today's employment report indicates that the U.S. economy continues to work through substantial challenges from the housing adjustment, high energy and food prices, and financial market conditions. The Treasury Department sent out 7.7 million economic stimulus payments to American households this week, and the payments will continue through mid-July. These payments, combined with the business investment incentives also included in the stimulus package, will provide significant support to household and business spending in the middle of the year."We are actually seeing "Chest Beating Bulls" after the last week performances, that is, after Markets rallied DOW 1350 points (11%), SPX 123 points (10%), NYA 1000 points (11%), and Nasdaq 330 points (15%).
Major Markets
Markets traded to weekly resistances, SPX 1422R and Qs 49R, with highly bullish sentiment after breaking above SPX 1400 and DOW 13000, and Nasdaq 2400.
Daily 200dma for major markets are obvious resistances with overbought condition. Daily price actions are showing negative divergences on price and breadth momentum.
Ideally, it is desirable to pull back during May and resume the uptrend in Jun cycle pivot. Continuing uptrend during May is setting up for a significant correction as daily and weekly are overbought.
I think that we will see a minor correction at this stage.
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