Pre-Market:

Good Morning! As I wake up with a cold this Monday morning, it’s extremely bullish out there. Last week the market shucked off a surprisingly high 10.2 % unemployment rate reading on Friday, and then threw us a curve ball by finishing up, as I implied it might. The S&P continues higher on a declining rate of  volume. There is little news on the economic releases, other than the Treasury auctions this week.

As of 7:33 AM, DOW futures are up 94 points, and international markets and futures are up across the globe.

I’m presently in Gold (GLD), I’m in oil (DBO) I’m in international emerging markets bonds (FNMIX), and international emerging markets equities (VEU,EEB,IDX,VGTSX,), and I’m even playing the fixed income stream (remember I’m old) with some bond and TIPS funds (PTRAX, VFICX, VIPSX). Please don’t raz me because of the choice of institutional funds — some of these are in 401K’s that have very limited fund choices. I’m not buying the international “bubble” theory for now; you have to remember where we’ve come from. However, if it appears we are going to have an international bubble, I’ll move out quickly.

The only domestic equities I own are in my day trading account, so you kind of understand my biases at the moment. I think my attitude toward US equities is being tainted by the present actions of Congress. My background is in monetary theory, so I have a tendency to look a little further out on the horizon at times, as opposed to just reading the current charts. And I don’t like what I see coming in the future with the dollar and inflation. But that’s down the road.

My Candle Pattern Index suggests to me that something big is getting ready to happen, with over 1800 equities consolidating for a NR7 pattern breakout – this is the largest reading this year. Right now, it looks to the upside, since the trend is your friend.  But it could just as easily take a turn to the downside — always keep in mind there’s no limit to the amount of curve balls the market can throw. That light volume on the S&P is worrying me.

Market candle scans from Friday read 46 to 8 bullish engulfing to bearish engulfing patterns, again suggesting a bullish day, albeit a little light in the strength reading.

So let’s have a bull day, and play the tapes and tune out all the other stuff. No new day trades for me as of right now, but I’ll add (and post) as I see opportunities arise.