The markets didn't quite know what to do with the Fed's news. First they sold off, probably because the cut was only 75 basis points. But the market then realized they were still getting a sizable cut, so everybody moved higher.
If you look at the three day charts, it looks as though we're in the middle of a turnaround.
On the daily charts notice tow things.
-- on all the charts, the last two days look like a bounce from a very low (as in yearly low) position. Once again, the Fed's rate cut came at a technically good time.
-- We could possibly be forming a double bottom, with the first bottoms occurring in mid-lat January and the second bottom occurring now.
2 comments:
Not everything is up. Commodities and resources, except oil are down.
The interesting thing about Lehman and Goldman Sachs is that there actual income delined substantially in terms of Y to Y. Of course, the expected decline was less than forecast. Nevertheless, its somewhat interesting - or worth dissecting further - the implications of a situation when two major financial institutions suffer net income declines of over 50% and this is considered really good news.
Still, I tend to agree with bonddad's analysis of the short-term. I expect the market will drift towards 12800. More economic data will then determine whether it drops back - perhaps below the 11700 support this time - or not.
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