So will it be a trick or a treat for the market going into the close? Bernanke just came on tv to speak about things we have heard a kajillion times in the last month. Not shockingly, the market responded with a nice pullback and now we are bouncing a bit but the charts look primed for a rollover if we cannot break over the 980 level. Watch for that but also know that if the volume comes in we could easily see a melt up to the 1000 area. Watch the levels and dont get tricked by Mr. Market when you knock on his door. The only other thing I feel confident enough about today is a recommendation to sell the Euro as it looks to be headed for another leg lower into next week against the dollar.
Friday, October 31, 2008
Trick or Treat?
Well there has been a lot of choppy trading in the market since Wednesday rate cut. Seems like a tug of war between the bulls and bears as of late. We are definitely caught in a range, although it is rather large. The price action seems to be hitting the top end of the recent range of around the 975 level on the SPX. We are a tad overbought on short term indicators but there are a lot of noisy things out there today. Its Halloween, its friday, its the last day of the month, its the lasst day of the fiscal year and quarter for many funds. What dat mean? Well simply put, it can create irrational price action. We could see window dressing into the last few hours of the day where mutual funds dump their losers and bid up their winners so there final numbers for the fiscal year look "better". Now, since most mutual funds are long biased, then they probably dont have winners, lol, so watch for a quick selloff if we cannot break the 975-980 SPX resistance area.