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Wednesday, December 29, 2010

Interest rates went the other way!



SPX made a HH and HL  and closed in the plus column that is positive. This is what I called for yesterday.  Range was pathetic 3.82 again.  The low of the day came right at the open and high of the day came at 10.18 at 1262.60  then a second attempt at 11.14 fell short at 1262.56.  This is some thing I have noticed in many issues.  The second attempt fails by pennies and the isuue falls hard.  Very similar thing happens at the low where the second low is slightly higher and the issue take off.  The drop was quick and hard.  SPX lost 75% of today's range.  This exited many bears.  My view is  as SPX came close to the high of the day a sell program hit and prices had to fall.  The chart shows a few gaps on its way down, near the end of the day.  This kind of close usually causes a rally in the morning contrary to the beliefs of many who would call for a gap down opening in the morning because of the momentum.  This very similar to Low of the day close where the next day has a very high probability of closing in the plus.  RUT did very similar except the second high 791.57 was higher than the first 791.51.  None the less both SPX and RUT had a DKOD which is very positive.  I am bullish.  And I also think the end is near. 
TNA;TZA; FAS;FAZ all had an inside day.  What can be more pertinent.  The markets  have been having slow very shallow range days.  This also gives a good set up for an outside day.  
The story was on the interest rates.  Above is TYD.  This is Direxion's 10 YR notes bullish ETF.  Here the trade is for rates to go down.  The first high 68.51 and the second was 68.10. The two black arrows.  No doubt it fell.  Now to the two blue arrows.  The first low was 51.21 and second is  52.04.  Today was a big day. Very big one.  If this was the turn in interest rate no one is talking about it could be very positive for the for the markets.  I will pay a little bit more attention. 
I am still waiting for the indicators to turn within the next few days.  Then I wil short.

Thanks for reading my blog and offering me encouragement. 

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