Stocks roared higher today after better than expected productivity and jobless numbers were released. While the price data was impressive, the volume simply did not back up the move.
It is looking like we might have a very defined head-and-shoulders pattern forming with our current rally completing the final portion of the top pattern: the right shoulder.
I’ve drawn the neckline on the chart and if this pattern is legitimate, the market will not close above this point of resistance. If things go as I expect, this market will complete the shoulder and it will be an excellent opportunity to short at the first sign of weakness.
As for now, we have some important figures coming out tomorrow: the unemployment rate and non-farm payrolls. Judging by today’s data, I wouldn’t be surprised to see unexpectedly good numbers that are nothing short of fabricated.
As preached by Tom Williams, short on good news. I’ll wrap things up for the week tomorrow.
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