By Mike Swanson
Nasdaq futures are currently trading up 27 points on news that Microsoft is going to buy Yahoo for a 60% premium. S&P 500 futures are trading up 13 points.
We'll have employment numbers out around 8:30 so the futures could change between now and the open, but the overall momentum in this market is clearly to the upside as I've been telling you for the past week and a half.
Despite the uptrend there has been a lot of negativity and doubt about this rally.
Wednesday's Investors Intelligence numbers showed an increase in the number of bears and decrease in the number of bulls despite the fact that the market bottomed the prior week. On CNBC yesterday before the open and as market futures were in the red one of the reporters said that the market will fall hard down to its January lows if MBIA gets a credit rating downgrade. There was fear on TV before the open.
Of course the overall economic news is bad too. We had poor GDP numbers earlier this week and a jump in weekly jobless claims yesterday. The economy is probably already in recession right now. But the market is in an uptrend for the moment and that is all that matters.
You can have countertrend rallies in bear markets, even when there is bad news, and that is what is happening right now. As the rally evolves more and more people will jump in late to the game and the number of people calling themselves bulls will increase. At the top people will be just as bullish as they have been bearish now. At that point I'll step out of the market and put my hard hat on as I think we're in for a nasty Spring. But this month will continue to be a good one.
A breakout is in progress for the S&P 500. I expect it to reach the 1400 level within a few days and won't be surprised if it happens with a 250-300+ up day for the DOW. This morning market futures are up big so I'm not sure what will happen off of the open or the rest of the today, but the overall trend is up.
If the market gaps up and drops off the open I'd just consider it a pause in the uptrend. Right now I'm not watching the market on an hourly basis. I'm long from near the lows and am simply going to hold my positions and look at things now on a closing basis. Just enjoy the ride. Even gold stocks should start to get going. Turn off your computer. Go out and have some fun.
Come back in two or three weeks and start making plans to sell.
By Arrangement with www.wallstreetwindow.com
