Wednesday, February 24, 2010

Interesting Reversal

After our now almost traditional mark up in the indexes either in premarket or the first 30 minutes, the markets have reversed and given back some gains.  This is quite atypical of the action we have seen much of the last year... more or less any day you have light volume and a "mark up" morning either (a) the index drifts sideways all day in the "square root" formation or (b) it drifts up on vapor all day.  Hence this action is interesting in that it's different.

At this point like a magnet the twin exponential moving averages of the 20 and 50 day bracket the S&P 500, with that gap waiting down at 1078 if and when.  A clean break of yesterday's low would set up some for a potential of a nice swoosh down especially if it happened today since some bulls surely were sucked in first thing in the AM...

Bulls want this level to hold, bears attack below 1090 with the "easy trade" to 1078.  In a normal era this type of action today would call for further downside as the way to lean.  In the "mark up morning" market era (where stocks can go up for weeks and months with little volume) of the past year, we just never know as historical precedence seems to matter little.  Still going with my old school lessons, and hedging some more for downside.

Recall the next few days are all about our drug dependence on Ben Bernanke.

EDIT 10:50 AM - never mind that reversal.  All it takes is Ben Bernanke to pledge free drugs for an extended period of time and the speculators cry in joy and try to buy stocks as fast as possible in between the tears.  Nearly 1% tagged onto the market in minutes.  It's great to know this market is entirely hostage to one man's willingness to throw kerosene in unmitigated matter...

The goldilocks speculator economy continues - Bernanke assures us we have a recovery, but not enough of a recovery to bother to dispense with emergency rates.  
  • Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that record-low interest rates are still needed to ensure that the economic recovery will last and to help ease the sting of high unemployment. Bernanke struck a confident tone that the recovery should endure.

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012