Yes, agree.. good numbers would be the shock I was on about.. however, I think upside could be limited, if the markets turn from around here.. I follow Treasury notes and bonds futures closely, amongst other things. Very rarely do you see them gap in the reverse direction from a low, without continuing over the coming months. Both notes and bonds gapped up from Friday. If they head towards some resistance areas of 2012, 2011 levels, we may see a well overdue correction in stocks before the santa rally.
I will tell you this much, I have been waiting for the correction in the equity market since the beginning of May, and it has cost me some trades here and there. It has always been looming over my head whenever I considered a position that might take a few weeks to a few months to materialize. I obviously decided against it, just because things seemed like they should correct. Low and behold..this week we just set in new all time highs.
Tomorrow we will hear from the Federal Reserve about tapering. The reaction that followed the past few Fed meetings was a lot of selling. My opinion? The markets overshot this week on the positive side, and are setting themselves up for a hefty sell off for the rest of the week if tapering becomes a reality tomorrow. There are some traders that take the stance in saying that the markets have already priced in tapering, and that it is not a surprise anymore. It has been a topic covered for the better part of 2013 so if it does begin, the downside is limited...but I beg to differ. Has the economy improved so fiercely that even with tapering being priced in, we are sitting at the all time highs? I say no, but if you follow the money, money has been flowing right back into the markets for the past month.
Anyhow, Q4 will be a very violate and interesting quarter for the markets.