Here's an interesting speculation from another thread. What do you think?
"We have suggested more than a few times to be on the lookout for the
market to rally into this employment report towards the end of the
week. Reason: The market has had a strong tendency to rally into
important and market moving economic reports of late and perhaps it was
starting to do the same thing again as early as late this afternoon. In
spite of the sharp rise in interest rates, it should not be lost on
investors, the distinct probability that at some point, this will be
interpreted as extremely bullish and could send the market soaring into
the stratosphere, in what would most probably then become the mother of
all rallies, the classic blowoff or "Run for the Roses". We have not
really experienced this in the broad market yet, although the Internet
stocks have already given us an incredible foretaste of what could be.
There are certain technical reasons, why this scenario could still as
yet unfold. First, we have had only one notable correction in the
Nasdaq since the October lows and that's the one we that we are in
right now. It is extremely rare for a market to rally off a major low,
in such an enormously powerful fashion, with massive percentage gains
to correct back just a small amount and not move to sharply higher
highs beyond the highs we recently established at 2533.44 on the first
day of February. The biggest surprise, should this idea actually pan
out could be the degree to which the market might actually rally beyond
these highs in both the Nasdaq and the Dow at the 9600 resistance
level, that repelled the market so far. The first indications that such
a scenario could be unfolding, would be a dramatic break up through
what has become a major resistance level of 2400 on the Nasdaq.
But in the event that something like this were beginning to get under
way, it is fairly obvious that a break of this 2400 level and the old
highs in the Nasdaq, accompanied by some sort of decisive break through
the 9600 level in the Dow could quite easily create an absolute frenzy
of short covering of near panic proportions as the realization of a
powerful surge through the 10,000 level would begin to dawn on
investors and traders who had bet wrong.
With the knowledge of how dangerous that has been in Internet stocks
over the past few years, still fresh in many traders memories, this
could add some extra intense fuel to this fire because as we have
stated before, there is a looming "Internet effect" out there could
affect many or even most stocks all the way from GE at the top down to
the smallest microcap at the bottom of the entire spectrum."
Best wishes,
I2
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