Monday, September 21, 2009

Weekly Watchlist 9/21

This week the markets will see plenty of data from home sales and durable orders to jobless claims and the latest FOMC meeting on Wednesday. The G-20 meets in Pittsburgh on Thursday. And throughout the week the treasury will be auctioning off several billion in short term bonds. It should be a macro-focused week in the markets and the SPX will start it off at 1068. Another interesting index to watch will be the Dow, as it sits at 9820 and close to that psychological 10k figure that the media is just drooling over. I anticipate this area to get hit this week and then you will really see the Johnny Come-lately retail investors pour into this market going into the end of month.

The dollar is still looking weak but the possibility of a bounce should be watched as its oversold and the Fed speak and G-20 meeting could ignite some defensive rhetoric from officials. Gold looks ready for a profit taking perhaps if it can't hold the 1005 area.

The SPX is pretty much in a vacuum zone overhead with the low supply area's from last Fall's crash giving us a good chance at seeing a rapid rally to the upside. Last Fall we saw a panic selling for fear of the unknown. This Fall we could see the markets race right back to 1150 or so as a panic buying comes into the markets, for fear of missing out on the upside starts to set in. Human emotion is a funny thing isn't it?

This is a momentum driven market right now and it has been for several months. These types of markets usually don't top out with a surprise crash or something. They top out with either a blowoff top on huge volume or a long gradual rolling top that plays out over several weeks or even months. We have seen neither yet. Trade safe.

The watchlist:


Shorts>> MCO

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