Good Morning Traders
We have seen continued support of this aggressive rally and long may it continue. The trading psychology has been simple, buy any dips as the market is being bought at every given opportunity as retail investors look to get aboard this move. Depending on your trading strategy, I would remain cautious for investors entering at these levels with a long term hold view, in my opinion these levels favour short term day trading strategies with a daily or weekly time-frame in mind. As long as these markets are being supported by accommodative central bank policy these markets can only move higher, the stock markets have become totally un correlated with the health of the global economy. The markets disregards poor economic data and it looks that the only thing that will be able to make them turn around is the speculation of reduced central bank policy.

Yesterday we had some good job numbers from the US, although small the economy is taking a small step in the right direction. The main move we saw off the back of this news was strength in the USD against some of its major currency pairs. One interesting thing to note was the fact that the USD/JPY pair broke through the psychological 100 level, a level it had been testing for the last few weeks. As it is Friday and we have had another strong week with gains across the board we would expect to see some small profit taking across the board towards the close of the US session.

As mentioned in previously blogs this strong equity performance can be attributed to the fact that other asset classes continue to produce negative gains. Money has been taken out of both Gold and Bonds as investors look to cash in on the recent move in the equity market. That is why I don't see any correction in sigh unless we see some substantial news that will force individuals to sit on the sidelines.

Happy Trading
@lowkeycapital