Stocks extended their gains for the second day in row, which really gets September off to a bang. But the non-farm payrolls looms on the horizon. How will the market react to those numbers?

We remain very overbought, so some selling would seem to be in cards at this point, but I would not rule out another run to the upside tomorrow as we head into the Labor Day weekend. It's what happens next week that's of primary interest to me, but I am expecting to see stocks give some of their...

I'm not surprised by the rally, but once again the market overdoes it in a big way. This time to the upside. And now we're very overbought in the short term.

So what was the excuse for the rally this time?
Well, the August ISM Manufacturing Index posted a 56.3, which was well above the expected 52.9. And apparently the market ignored the August ADP Employment Change report, which showed that private payrolls fell by 10,000 last month, instead of an an expected increase of...

Yesterday I said that the Seven Sentinels were suggesting yet another bounce after Monday's sell-off and low and behold we got a bit of a rally. Of course it was an intra-day rally, but it was a rally none-the-less.

So is that it? Probably not. I suspect another pop higher is still in the cards, but the unemployment report is looming later this week, so it's a difficult call to predict what may happen.

Here's today's charts:


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I had anticipated a gap up this morning that would eventually give way to selling pressure as the day wore on. Well, we didn't get a gap up after Friday's bull rout, but we certainly saw some selling pressure as the day wore on. That should tell you something. Namely, that this is now a bear market and gains evaporate quickly and also that this market is getting weaker.

Here's the charts:



Back to the trigger point on NAMO and NYMO....

After 3 weeks of bearish action, this market appears inclined to test SPX 1010, and many believe Friday's bounce is just a short-term play at best. As for me, my last entry is at 1079, and if I could break even, I'll take an exit.


First up is the hourly July chart I've changed to a 2-hour chart, to consolidate space. If the bounce continues, I can see a test of 1070, which is a 50% retracement...