New Market High Soon. Good News and Momentum Will Prevail. Flash PMIs Thurs

Yesterday, the market tried to rally, but it couldn't get anything going. The price action looked a little tired and stocks might need a breather after a big run. We are within striking distance of the all-time high. This afternoon the FOMC minutes will be released. Janet Yellen testified before Congress last week and I am not expecting anything new. We know that if economic conditions deteriorate, the Fed will pause tapering. Flash PMI's will be released overnight. Weakness in China has been overshadowing the recovery in Europe. China's numbers could be a little light, but growth in Europe should be better than expected. Last week, Europe's GDP numbers were better than expected across the board. Initial jobless claims could be impacted by bad weather. Traders are willing to give current economic releases a pass and it will not be a rally killer. The debt ceiling has been extended by a year and Obamacare will be delayed for small businesses. These two events reduce uncertainty and that is bullish for the market. Earnings have been good and profits are up 7.5% year-over-year. Cash flows are at record levels and companies are using that money for M&A and buybacks. The recent rally is a little overextended, but the market should be able to challenge the all-time high in the next week. Unrest in Turkey and the Ukraine are not sparking fear. Global credit conditions are stable. I bought some calls yesterday and I will add if the SPY closes above $185. I won't get aggressive until I see the reaction to the flash PMI's. Ease into call positions and look for stocks that are in an uptrend and are breaking through horizontal resistance. OLYMPIC HOCKEY - GO TEAM USA!!! . .

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