U.S. equity markets are expected to open higher this morning based on overnight trading. There were no major overnight events to affect the market. One concern today will be whether traders can pass on the spectacular gains from this week and hold on to their positions over the week-end. Short-term traders are going to have a difficult time passing on the tremendous returns from this week’s rally; therefore I expect a profit-taking break late today. If this takes place then look for a rally early to drive out the weaker shorts then a sell-off late in the day.

The fundamentals remain weak so in my opinion this is a technically driven rally. Furthermore, a support base was never built which usually means there will be a retracement down to test the validity of the bottom.