Seven straight weeks rally

Last time we had 7 up weeks in a row was in May 2007! This is an incredible bullish momentum. On the other hand any resemblance with 2007 peak is worrying. Are the last comers going to get burned again?

VIX has slipped bellow April's low. At least a little correction is unavoidable but how high are bulls going to push SPX before that? My guess, based on "volume at price", is somewhere in the 1300-1320 area.

The short term remains hugely overbought with SPX no less than 23 points above SMA 120 but this doesn't seem to bother the bulls too much, SPX  stays at the overbought level since the beginning of December.

Market was also helped by a weaker dollar today. Dollar is at a crossroad, it's very close to triggering a "sell" signal. A weaker dollar is going to help the bulls and probably the "gold bugs" too. Today precious metals were down despite the weak dollar but I don't try to speculate too much on this fact.

Next week is going to be extremely interesting with some of the big guys reporting the earnings, GOOG, AAPL, MS, C, GE. These are market movers so I expect big moves in SPX each day one of these guys are reporting their earnings. In the past market rallied in the first 3-4 weeks of the earning season, when the strongest companies usually report, and crashed after that. It could happen again by the end of this month, but this is just a guess. It's better to stay with the trend and to be fully hedged especially when the trend lasted for such a long time.

Market is closed on Monday, so we are going to come back to the "trading desk"s on Tuesday which is going to be a hell of the day with AAPL, C, IBM, WDC, DAL among the companies reporting their earnings.

Don't forget to leave me a message. I want to hear your opinion!

Have a nice weekend!

babaro