Monday feelings

The bull market was in fury last week, the Dow Jones has gone passed the all time high of 12,0000 marks. There seem to be no stopping the DOW and the NASDAQ from continuation of the bull rally and we may enter a "Santa Clause" rally moving toward December

Most believe that the current stock market rally has been fully justified because the key fundamental factors remain strong. The US economy is stable and not weakening as much as many in the market have feared. Based on the first half of quarterly reports, earnings report remain reasonably strong.

The interest rates is expected to remain constant in the immediate future and inflation outlook seem to be contained at good level at the moment to deter the Federal Reserve from making rate changes. Couple all of these factors with the current valuations in the market, with the S&P 500 stocks trading at around 16 times earnings and you can’t help to conclude that the overall market remains bullish.

Although earnings growth has remained strong despite some of the economic indicators slowing down, but the decrease in energy prices are helping the bull.

The only concern is that the immediate future of inflation to wary the market. The core rates of inflation, as measured by the Consumer Price Index (CPI) have been been up 0.2% each of the past two months and at this moment the market accepted without too much concern.

There are even analysts argued that some stocks tend to be undervalued at this point, based on the combination of interest rates, bond prices, and earnings growth. If more of the big institutions boys in the market start to feel this way, then the market cannot help but stay in rally mood.

Although there are always risks that the market , in short-term there are always chances of pullbacks and volatility. A short-term trader should always keep in mind support and resistance and position trades accordingly. For the intermediate-term, expect the bulls to continue to have the upper hand in the market. Hooray to the bull.