Tuesday, December 16, 2008
Cuts Like A Knife
Well there ya go! Markets loved Big Ben getting in there and slicing the interest rate by 75 basis pts! We are now effectively at 0, hooray just in time for the next bubble to start, lol. The dollar got simply massacred even more than I anticipated. Euro was up 500 pips today. That is just unheard of! 1.4115 was the high for the Euro. It was at 1.24 like two weeks ago. Nevertheless, gold got a bounce up to 860 after the cut and oil actually showed relative weakness staying around the 44 level.
Overall the SPX finished just about as bullishly as you could imagine. When it broke 885 it was clear they were gonna push this baby into the close. We closed about 913 on the futures. Thats fantastic in my opinion. I have been saying we need a close above 900. Even better would be 915. Now we need a second day continuation. I think we get it. A gap up in the morning would confirm this rally higher and probably get us into the 930s fast.
You have to respect the price action when it wants to go higher. I am gonna go out and say I think the SPX sees 1000 by Dec 31. It could even come by Christmas if all works out well. I am not saying the bull is back in town but at least for an intermediate term (1-3 months) the panic has reached its peak. So now we will wait and see what the charts say about how high we go. Bottom line is there are plenty of bears still yet to cover and I think that occurs above the 920-930 region. Get ready for a monster short squeeze that could rocket us to the low 1000s in a hurry. Of course there is always a chance the market reverses, and in that case I would add to shorts with a close below 875.
Ultra longs are definitely in play here with the SSO, QLD, and UYG looking best. Also for more individual stocks check out my buddy DayTraderRockstar over at DaytradingRadio.com for excellent live intraday market commentary. He has been hitting it out of the park lately.