The Last Dance

There are a number of reasons why I believe strength early in the week could lead to weakness later in the week.
  • Investors have warmed up to the market in the past couple of weeks but are still hesitant. A further rally, especially one that takes the market over resistance, could get sentiment into the extreme territory that typically leads to a pullback.
  • Seasonality is strong today and tomorrow but turns weaker on Wednesday.
  • The market is overbought so I would be surprised if the market could rally uninterrupted for the entire week.
The market's first test will be the ISM report today at 10. I expect a dissapointment so it will be imperative for the market to shake off that disappointment after the number.

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