QE2 solidly in place until June

Ben Bernanke spoke to the media recently stating that the Fed sees signs of improvement in the economy and will continue with the QE2 program started last Nov until its completion in June this year. Giving solid reason for the markets to continue with the rally which was beginning to weaken somewhat towards Mid April.

Earnings have come in stronger yet again which on the fundamentals side should get the "investors" into action as the PE multiple of the market is still quite low.

While, geopolitical events have continued to hit the tape the overall stride of the market has been forward brushing off most of the dire events of the first quarter.

As of the moment we have breached the highs of 2008 on SPX, Nasdaq, Dow and RUT, this might be an area of some hesitance but if it moves beyond we might have a decent move upward, with the fib extensions and all that.

Apologies to readers for another gap. I'll be more active going forward.

Jan 10 Market Recap:

SPX has done well in 2010 surviving scares at the 1040 levels and breaking above the SMA 200d as well as the 61.8% Fib retracement level. While it seems unlikely that SPX retraces a full 100% in the near term, it could definitely reach the 76.4% level at 1361 EOY. Near term traders are looking for it to reach 1325 level a good 56pts higher.


Nasdaq has been leading the major indices since the opening of the new year. Probably involves a sector rotation into technology stocks which may continue to benefit from emerging market demands from a fundamental prespective. Weekly chart below shows room for further continuation target at 2861.51, so about 154pts higher.

The 30min chart shows sharp moves, up and down although the recoveries have been strong just as the selloff has been sharp. So would require some careful trading. Although the golden cross on the above chart should bias us upward in the short run.

2011 - Welcome

I've been away but in the new year I intend to be more regular.

Themes to watch out for in 2011:
1. Unemployment in the US
2. Housing overhang
3. Euro-zone debt concerns
4. Fed's monetary expansion and Budget deficit, Rate hike
5. Currency wars, and China instability
6. US politics

Aug 30 Market Recap: 1040 again?

After a posting break of sorts.

The market staring down the cliff edge once again. After the sharp selloff between 11th and 25th, we almost fell over into calamity territory. Once again the SPX 1040 level was supported, miraculously I'd say, retested and then supported again. Four times in all since we started down the bearish path in April. Once again we are poised to retest, and this time we might fall over. Tomorrow comes home price data, consumer confidence and to top it all FOMC minutes. Doesn't look rosy at all.

I would think the retest is imminent, thanks to how close it is. I do get the sense that the market is still unsure about breaching 1040 or going down to 1010. Although the media noise is definitely touting increased concerns about the economy. We'll see the price action tomorrow to find out how the month of Sept (traditionally a bear month) fares.

Aug 13 Market Recap - Week look back

Some respite sure, but what to expect going forward. Below is the hourly graph of SPX going back to June. Comparing the June 26 with our current dip there are definite parallels and the market view appears to be of a selloff to touch our green line support. We'll find out.

What is different, first we seem to have some support at SPX 1010, which is the higher low from the bottom 2009. We've stayed above the trendline for over a month and are a bit away from it at the moment (would require another big selloff to change that). Next I think the moving averages SMA 50 and 200 are way different this time around. So what I'd careful of is a bounce higher as the markets participants look for a dip. Something like the July 19 bounce. In case of a dip I'd watch for the trendline support for a reversal.

Aug 12 Market Recap

Not posting much today just a plot of SPX. We may get some respite from the bear action.. but touching lower green support seems likely nearterm

Aug 9 Market Recap - Markets of a thousand cuts

The markets been trading a bit higher lately since almost Aug 1,2010. Was seeing some weakness as short interest increased as we touched the 50% retracement. The thousand or four :) are marked on the chart below. Look at the weakness last week, the support line has held things together so far and we have crossed the 50% line convincingly this time. How much higher, we've talked about it earlier, 1140 remains the high target. As of the moment I'd be looking to short there abouts.