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Thursday, December 11, 2008

Oil Up, Market Down: A New Trend?

Here are the last 10 days on the SPX, 15 minute intervals. Today was looking very good as we rallied off a gap down. 885 was looking like a very important support point, as it was being defended quite well. 918 was not only the high of the last 10 days, it was also where the 50dma was today, so it looked like we could challenge both resistance levels in one shot. Then they pulled the rug out from under us.

885 is no longer a support level. Now we have to hope we can stay above 845, and if that goes, 818 had better hold. Fortunately, we did not get high volume today.

The TNX and TYX, 10 year and 30 year treasury yields, both dropped again pretty early, and the market couldn't overcome the downward pressure. I have no idea what is going on here, but it sure looks like somebody wants interest rates to stay very low.

The Nasdaq stayed above a support level at 1493. I mentioned before that we may test the broken trend line from above, and with today's action it sure looks quite possible.

The Russell 2000 has a support level just above the trendline, but the size of the moves this has been making has been chewing up and spitting out support and resistance. If it can keep from breaking the trend line, we should be ok.

XLF was the drag on the market today, dropping almost 8% and slicing right through the trend line. Financials have been leading this rally, but they are threatening to relinquish that lead, and could kill the rally.

Oil was up 10% today. The correlation between oil prices and the market may have ended.

I will be back with an update shortly.

1 comment:

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