During the course of the entire trading session yesterday, bulls took a firm grip on proceedings in US equity markets. Never once did the bulls show any nervousness and simply kept on accelerated buying. Day traders in the Bear Camp would have felt thoroughly disgusted with one way traffic in US markets on 05 Nov 2009. And traders, who have positional shorts, must be sweating profusely by now. Reason : if in today's trade Dow crosses 10160 then it is curtains for traders on the short side. Shorts will have to be covered in all promptness because US markets will then spike up. With shorts scampering for cover, Dow will gallop towards 10360 and beyond in quick trot.
Now that we understand the present plight and apprehension of positional bears in US markets, let us examine the reasons for absence of volatility in last trading session. Few of the important triggers for such a strong bullish demeanor of US markets are listed below:-
- Jobless claims had declined to their lowest levels in ten months.
- Productivity surged to 9.5% last quarter, which turned out to be much better than street expectation of 6.5%.
- Cisco systems delivered strong positive results.
If you closely examine the strong drivers of yesterday's US markets surge, it is evident that the reasons are not so powerful that Dow has to notch up 200 plus points and close above the psychologically important level of 10000. It is not about just gaining 200 points that is worrying the Bears, it also the manner in which Dow accomplished the same. It was as if with utter disdain that Dow trundled northwards, vanquishing all attempts to pull it down. Such imperiously confident strides by Bulls foretell bigger moves in coming trading sessions. No wonder the shorts have to hang on to the slender thread of prayers, fervently hoping against hopes.
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