Pension Funds looking for both Yield and Safety continues to stampede into high-dividend paying blue chip stocks (especially the component companies of the DJIA), pushing Dow into record territory on Friday.
With the bond market showing some sign of weakening, the flow of funds into blue chip stocks may continue to accelerate, keeping the market on the bullish side.
But the party must end one day in the not too distance future, as it is just a matter of time. The key trigger will be an uncontrollable rise in interest rate, which will also come soon.
As a trader I will continue to watch the technicals, and for now the technicals are still in the ullish camp on the Daily, Weekly and Monthly time-frame, pointing to a blow-off top.
However, on the short-term 5-minute time-frame the Key Level for Nasdaq on Monday is Friday's swing high 2947.50 area.
-- NQ closed down below the high on Friday on end of day profit-taking activities. A break above Friday swing high is likely to trigger another round of short-covering rally, with the next upside target at 2980 area. If market internals can get really bullish it may blow through all the way to 3000.
-- Failure to break and stay above Friday's swing high will cause the market to consolidate and pullback down to supports.
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