Markets overbought here into resistance!

Due to loads of travel, we are going to keep this short and have a bigger report tomorrow.

When we call a low for the market, we never know what’s gonna come of it. We just ride it until it says otherwise. So far, it has not said otherwise. We called a low because the market had three straight upside reversal days culminating with the big enchilada on the employment number day. We thought the fact the market was buying bad news was good news.  We also told you we thought China had turned the corner and that in fact is going on.   Leave no doubt the easy money play is back. Bad news for the economy is good news.

Markets are overbought on a near-term basis here. We suspect as we get closer to resistance, pullbacks will be in order. We are close.

The good news is a few leaders are emerging. There has not been too much in the way of leadership as this rally has been mostly stuff off the bottom. Most leaders have inched up or just sat. The strongest groups are auto parts retail, tobacco, defense, cruise lines, internet travel with a few airlines, reits and utilities working.

A massive amount of earnings are about to come out. The good news is that some perceived bad news has been bought up. A few big financials reported blah numbers, opened down and finished up. This is a change from the recent past. We’ll see if it continues.