The futures were on their way to the tradable, 1951.00 rally target shown when the final bell put a temporary end to Friday’s silliness. The whoopee cushion rally followed an equally steep and gratuitous plunge, the ostensible cause of which was alleged “news” concerning weak job growth. What a shocker! Just why punk payroll data should have caused stocks to plunge is a question no one can answer. However, judging from the explosive recovery that followed, there were plenty of misgivings about the initial reaction.
And short-covering as well. Will it spill into next week, pushing the futures to new recovery highs? Quite possibly, although I strongly doubt there’s enough voltage to power shares to new record highs. Still, all it would take would be for skepticism to wax every time the Dow rallies two- or three-hundred points. Bears are the only serious buyers left in this market, and so we should expect DaBoyz to do everything possible to cultivate their support. Mainly, this means using lulls in the action, and occasional feints lower, to set bears up for the touch of the cattle prod. Frankly, bears can’t seem to get enough of this, and that’s why we shouldn’t completely discount the prospect of a fatally weakened stock market staging one last hurrah.