Tuesday, October 26, 2010

Yesterday's Markets

First, notice the two lines established from previous highs over the last 10 days.

Prices gapped higher at the open (a), peaked quickly (c) but couldn't maintain momentum so they fell back to a previous support level (c), established a few days ago. Prices dipped over lunch, rallied into resistance (d), moved a bit higher (e), but then fell into the close (f). Also note the increasing volume at the end of the day.

And yesterday we had the "golden cross' -- the crossing over the 200 SMA by the 50 day SMA.

Treasuries gapped higher at the open (a) then traded sideways for a few hours before moving through support (c) in a big way (d). Prices ended near their lows (e) of the day.

Note that Treasury prices have broken through their uptrend (a) but are now moving more or less sideways (b). The reason for this is fundamental support from the Fed.

The dollar gapped lower (a) at the open and then moved sideways for the rest of the day (b).