October 9, 2009 (FinancialWire) — Dr. Joe Duarte (http://www.joe-duarte.com) recently noted: The S&P SPDR ETF (NYSE: SPY) and Powershares Nasdaq 100 ETF (NASDAQ: QQQQ) look ready to move higher as Alcoa’s (NYSE: AA) better than expected earnings boosted after hours trading and could lead to a revival of the stock market’s rally. Meanwhile, Goldman Sachs (NYSE: GS) shares are on a huge momentum run of their own.

Duarte added: It’s all cylinders firing hard and fast time on Wall Street. Indeed, the stars seem to be lining up in a big way for the bulls.

Earnings season is off to a good start. Initial public offerings seem to have returned. And even Washington seems to have tempered its appetites, delivering what could be a somewhat less severe health care bill.

That means that hot money can come out of its hiding place and fund managers that missed the rally have a chance to play catch up. In many ways this market feels similar to that period right before the fall and winter 1999 blowoff before the dot-com bubble burst.

To be sure, when Goldman Sachs shares look this strong, there is high confidence in the rally.

Yet, the season is still early and there are bound to be some negative surprises along the way. More important, though is the potential for the economy to actually start showing that it is recovering.

And if you think over the longer term, not everything is looking as rosy as Alcoa’s cost cut influenced earnings improvement. A significant example of potential trouble ahead is the negative trend in consumer credit, which fell for the seventh straight month in August, according to the latest report from the Federal Reserve.

This is the first time since 1991 that consumer credit has contracted for seven straight months, a potentially ominous sign for the economy, since consumers are still the major driving force in the U.S. The caveat is that the data has a two month lag, so we won’t really know where we were in October until December. By that time it may self evident where things start, as the holiday season is upon us.

Add in the potential for a collapse in commercial real estate, and perhaps a second wave of housing problems and the whole thing can come crashing down.

But today, at least before the market opened, things looked excellent. And as a trader you have to go with the action on the price charts.

Duarte’s conclusion: If you’re heavily committed to the markets, it’s good to be skeptical. So trade aggressively, but don’t believe everything you see. Stick to your trading plan. Pay attention to sell stops. And if something you hold isn’t working, there is no reason to hold on to it until it does.

You can read about trading ETFs in more details in Market Timing For Dummies.

Make sense of today’s nonsense. Get Doctor Joe Duarte’s Market I.Q., at:

http://www.joe-duarte.com/free/order_choices.asp and subscribe to www.joe-duarte.com, for its daily energy review and stock picks.

A book for this market - The All NEW Market Timing For Dummies. at: http://www.tinyurl.com/market-timing .

Duarte partners with the Investors Resource Center at Investrend Information (http://www.investrendinformation.com).

Duarte’s IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.

He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela’s political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.

One of CNBC’s original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron’s, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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