As a potentially bullish indicator, American markets held onto yesterday's gains as the Dow closed above the critical psychological level of 13,000 and the S&P closed above 1400. Even more importantly, both averages closed above their 200-day moving average which ought to have made investors giddy at the prospect of even higher highs. Today's job report was much better than forecast as the US economy only lost 20,000 jobs in the past month. For all these positive indicators, however, one gets the sense that the market isn't brimming with optimism. Trading volumes are down since March and market breadth is not a favourable as it might be if a significant bull run is imminent. In other words, there is good reason to believe that this rise is petering out and bumping up against resistance levels here. As a side note, I would add that Warren Buffet meets with Berkshire-Hathaway investors in Omaha tomorrow. It will be interesting to see if the implied pessimism of the Mercury-Saturn square on Saturday carries over in his message.
While I've been mistakenly bearish in the face of the past couple weeks of rising prices, I am maintaining my generally bearish stance. Saturn's turns direct today and will oppose the S&P Mercury. Jupiter turns retrograde next Friday the 9th which may also change the hitherto bullish market sentiment. Monday May 12th looks particularly volatile on the downside. After the lows are made somewhere between May 15-25, I think we see another meaningful rally that approaches current levels. This will set the stage in mid to late June for a more substantial correction that retests the winter lows.
