Why the stock market will continue to get pumped up to new highs

David Frost // Market Outlook


May 28  

Friday is the next GDP report.  You’ve heard me discuss the invisible hand under the market, and at this juncture it looks like all systems are go for higher prices in the stock market.

The Federal Reserve board members continue to jaw bone their stance, and there are more doves and hawks.

As the slightest hint of news that could be construed as positive, you’ll see the market take off to the upside into next week and beyond.

Many of the market participants are scratching their heads on the notion that the market shouldn’t be up here.  They believe that there are too many things holding our economy back like debt, deficits, phony employment numbers, and much more that should cause the market to drop.

Newsflash – The economy is not the market.  The market trades on its own terms in accordance with its own cycles and money flow.  When the cycles top, and it’s time for a retreat, then so be it.

If the market perceives the economic data to be dovish (pay close attention – not bullish) then they will send prices higher in stocks, lower in the US Dollar and higher in various commodity related markets such as Gold and Crude oil.

It nothing more than a game of follow the money.  Especially when the volume trends are light, the probabilities of any significant decline remains remote.

In tonight’s video I’ll lay out the likely scenario and what numbers on the S&P 500 are important support and resistance levels.  In addition, it looks to me like the gold and crude oil markets may get a lift if the Fed doesn’t disappoint.

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost