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Futures are down slightly this morning as investors digest the big news of QE3. The market is rather stretched at the moment and the possible "shooting star" type candle that ended Friday's market leaves me ready for the possibility of some kind of pause in this break-out rally.

spxstar

A 3-10 day pull-back that tests the break-out point around 1438-1439 or at minimum a sideways move would not be unexpected and would give the market a chance to correct itself a bit. Of course, any candlestick pattern needs to be confirmed and we will not know if Friday's candle is a shooting start until that pull-back occurs. Today's Rosh Hashanah holiday also gives me the expectation of a rather slow, lower volume day.

As such, I will tighten stops and wait to add any positions.

All that said, I expect pull-backs to be shallow and dips to be bought. Bearded Ben left little doubt that this market will be propped up to the tune of 40 billion dollars per month with an open ended deadline. Half a trillion dollars a year is no joke and unlike previous QE that had a specific end date, this new and improved (sarcasm intended) with no end date gives traders a platform that is rather bullish. Is this the best thing for the economy? Probably not, but as a trader I will take what Benny gives me and use it to my advantage. So I leave you with this video. BTFD!

 

                       

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