I have been telling everybody to be patient after the bad Jobs report. We told everyone we should expect market to turn better end of this week or next. Today it happened after Dow dropped for 6 consecutive days.
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At midnoon, Dow increased by an overwhelming 180 points. What a Show of confidence by Dow. Of course, you might want to credit it to relief over China's GDP. I think it is also due to the market being oversold.
It would be very interesting next week how things unfold. I would say my strategy would be more bullish now. Whenever Dow increase by a triple digit figure, it might signify a temporary rebound. Couple it with 2 up days that close at a high would be great. Let us see if Monday also increase. I heard in CNBC that there is anticipation on Sunday that China might introduce some policies to help their economy. Let us also see whether it will happen.
So let us watch how Monday's market direction is and take note of China news.
Do not forget that we are in earnings season. Today the market also gets a boost from the financial sector. Wells Fargo and JP Morgan has better then expected earnings results. And these 2 companies are the representatives of the financial sector. If financial sector's earnings are great, look forward to more positive results from other companies this month.
In Malaysia, KLCI has been rallying on after breaking its 1600 resistance. In fact it is at all time high now and the best performing index in the world. Expect more KL companies to hit all time high soon.
Just last month, at a seminar with Affin bank, I told our Malaysian friends that once 1600 is broken 3 days without coming back, expect the market to fly. Indeed now it is at 1630.