Optimism continues on US jobs data

Wall Street notched up its 5th straight day of gains last night as more evidence emerged that the economic recovery was on track emerged from better than expected jobs and service sector data. The Dow Jones Industrials ended at 11,723. Investors are watching and waiting for Friday’s U.S. non-farm payroll numbers to confirm the strength of the economic rebound. If these figures exceed consensus then expect a very strong day on the markets.

In the U.K., the FTSE 100 is currently up 27 to 6,071 despite some poor retail trading figures from the likes of Mothercare.

As I mentioned on a previous post, when sentiment is this strong, I tend to stay on the sidelines. As Warren Buffett once said “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”. There is a little too much greed in the air for my liking. I know a correction will come, it might be days or weeks, but this is the time I will be buying, not now. Sure opportunities will be missed on these momentum trades, but I know I can sleep at night buying on dips rather than
on peaks. When the Sunday newspapers are telling everyone to get on the equity bandwagon my advice is to be cautious.