Tuesday, December 14, 2010

Fed minutes and negative impact on the markets ?

SPX made a LH and LL  and closed in the positive.  SPX did the same thing a few days ago the effect was positive the next day.  SPX had a range of only 8 points and closed up 1.10.  RUT made a LH and LL and closed in the negative and had a range of mere 5 points.  SPX is up 6th day in a row and RUT is down 2 days in a row.  They are little bit out of sync.  
The chart on the left is spx hourly.  Looks to me as expected after hitting the top of channel spx is coming down.  I would be surprised if spx goes below 1210.  By my count we SPX still has about 100 hours before this move tops out.  I would be a buyer if I see spx at 1210.  
The chart on the left is RUT weekly.  I put this one up because on hourly, daily and monthly charts RUT is above any resistance line one could draw.  It pulled back today without hitting the trend resistance line.  It may a just have 2/3 day hit to come to the median line around 755 and take off  again.  Tops don't form on just one spikey bar usually 2 or 3 bars which is consistent with spx timing.  
The chart on the right is FAS.  It quickly lost 25% of the rally from 21.25 to 27.25.  I am expecting this to go at least 24.75 to touch the DOMA or even slightly lower to 24.25 to complete the 50% point.  The news from the fed was nothing but the FAS reacted very negatively and bonds prices fell and interest rates went up.  This is the first time markets have reacted violently to the negative side.  It is worth noting.
The chart on the right is FAZ.  There was little bit of movement there too.  But the price is quite low on this one and larger quantities have to be bought for any sizable trade.  Larger lots do cost more.  The buy signal on FAZ got turned on today.  I will trade this carefully

I have a signal on all fronts to go short.  I am bearish.  I will stay like that until indicators flip
Thanks for reading my blog and offering encouragement.

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