The summer holidays are now over, so the long weekend for me and other guys in the UK... Now, back to my screens, I'm wondering if Friday's rally did really happen and was not a dream . It’s said be triggered by the "better than expected" US GDP and "less pessimistic" Helicopter Ben's comments but I didn't buy those two reasons, just journalists job to find some reasons to any moves. Afterwards I'd say it looks like it was a Friday's short squeeze, probably strengthened by the UK bank holiday yesterday: the Bears cut their shorts for the long weekend. Both Bulls and Bears have had some bad experiences keeping their positions over the weekends.

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Nice post, glad to see you enjoyed the holiday. Did Friday's rally really happen? I'm not sure, it blew by me as well. Though I do agree with your assessment of short-covering. In my experience, once the shorts cover to a certain point, the bulls (fools) take over and inflate the rally. This just gives the bears ample opportunity to short once again.

THE WEEK does pertain influential and potentially market manipulating data. I like Chinese PMI tonight as the catalyst before NFPs. Indian GDP remained robust this month in addition to Poland's GDP. If we see China PMI upwards of 53, commodities should benefit the most. So one could play that through equities in Materials and Energy sectors; XLB-materials, XLE-energy for StateStreet SPX ETFs.

The key for NFPs will be private sector job growth. Corporates can only maintain growth for so long through cost cutting measures and eliminating redundancies. Sooner or later top line revenues need to improve. Job growth is a prime measure of this growth. Hence, if private sector jobs arre miserable, equites will tank. Though, if the market is efficient, shouldn't all of this data be priced in? Not likely.