The coming week is considered a VERY important week for America. Having dropped for 2 consecutive weeks did indicate a slight turning in confidence in the US market. I am looking for signs in the US market to tell me that the general market sentiment has changed.
On Friday, the Chicago PMI figure, which measures the enterprises performance, is excellent. The actual figure 58.3 is so much better than the forecast of 50.3! Looking at the american market for the past ten years, I have not remembered beating by such a large margin.
And YET, the DOW acutally goes down 200 points on Friday.
Possibly I suggest those looking for bargain hunting to be patient and wait a while this week. Let us study signs of how American market takes in the reports. It is important to know what the market confidence is like now.
Tonight, we have the important ISM report, which I think would likely beat the consensus figures given the strong chicago PMI last Friday. This wednesday and friday's employment figures should be a "NOT SO BAD" results too. For the past 2 years, May employment figures have always shown a drastic drop and fared less than expectations. This round, it seems that employment is still OK. So let us see how the market reacts.
In summary, if US market drops amid the Good ISM report and the "Not so bad" employment figures, then a danger sign of a waning confidence may be showing up. Be prepared for more backlash should it happens!