All About 5

A couple of interesting things occurred on Friday's move upward. First, the market double bottomed off the 1117 level in the S&P futures on Thursday night into Friday and then went up in a straight line as those bears who thought we were reversing lower following the break below the June high during the trading session Thursday, were forced to cover their short stock positions and their long bond positions. (bond got destroyed by the way reaffirming my bearish view on rates).

This reversal in posture was so powerful that it did two things for my P&F Model. First, momentum broke out on two different levels with the ROC model now at a new recovery high - very bullish in my opinion. Second, the PForce model reversed the negative sell signal from a few weeks back and returned to its bull market posture. The last short period blip we had like this was in 2006 which was followed by a tremendous run to the highs in the S&P around 1500.

With the move upward again in the Pforce model again, my overall market posture is now a 5 (out of 5) which argues that the next upleg in the bull market has now begun.

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