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Wednesday, March 18, 2009

FOMC Boost: Right Into Resistance

The SPX, with fibanacci retracement levels. As you can see, we are at the 50dma, the January low, and the 50% retracement all at the same time. Draw your own conclusions.

The Nasdaq, with the expected volume boost thanks to the Fed. We got through the 50dma here but are sitting right on a resistance level. We are also right in between the 50% and 68.2% levels.
The Dow industrials lagged again today, but did manage to get back above the November low, tag the descending trend line, and pull back. We'll be looking for a test of the 50dma, probably tomorrow..
The Russell 2000 is also on track for a test of the 50dma, which now coincides with the January low. The MACD histogram is about as high as it's been in the last 56 months, so despite today's big move, we are probably running out of steam. The only question is do we pull back, or collapse?

XLF was the leading sector all day, and really took off afte4r the decision was announced. This is now through the 50dma and has made a higher high.

Bernanke has repeatedly said the Fed will buy the long end of the bond market, and this time it sounds like he means it. Traders bought up 5, 10, and 30 year treasuries trying to get in front, but I suspect another sell-off will come as the bond market calls him on it. I don't get a comfortable feeling here.

I'm pressed for time but should have the new highs post in a copule of hours.

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