Market Disconnect

 Today may not have been tht impressive, but it certainly could have been a lot worse. The market was in the process of tanking after teh Conference Board consumer confidence numbers came h=out haf an hour into the seesion, but what that did instead was cement a support level at 1195. We rallied from there, propelled in the afternoon by the release of the FOMC minutes, in which a near panicky Fed is contemplating several steps to take, nn of which will fix anything but the markets. However, that is exacly what the market is looking for. I am still looking for a test of simple 50dma, which is now abot 1258 and dropping  (the exponential average is about 20 points below it, so we will tet that first). MACD histogram is still rising, so I do not expect any sudden reversal, but sudden reversal never are expected.

 

Crude oil is working it's way back up, but is now facing it's first real resistance level, and is also coming near the 50dema. this will rise if stocks rise, and won;t if stocks don't. 

 Gold, on the other hand, seems to be in a world of it's own, ignoring every other market out there. It came down to perfectly test the bottom of it's current trading range. I do not expect a breakout any time soon, as gold has a history of staying in trading ranges for months. but, as I said, this is now in a world of it's own.

The ten year treasury has done a whole lot of nothing after it collapsed late in July. The small size of the move up shows the bond market is not nearly as optimistic about the Fed's ability to fix things as the stock market is. I don't argue with these guys.

Also doing a whole lot of nothing is the dollar. This should have been rising while the market was screaming down, but it didn't. It is also not collapsing as the market is rallying. Something is disconnected here, and I hope it doesn't cause trouble in the future. So far, it hasn't, at least that I can see.

I read some of the minutes of the last FOMC meeting, and was struck by two points: the FOMC is "comcerned" about the lack of progress in the recovery (read "panicking"), and there is an increased level of dissatisfaction among the dissenting FOMC members, who seem to feel the Fed is wasting time. The next meeting will be very interesting.

I will have the new highs update shortly.