Wednesday, December 8, 2010

Yesterday's Market

Prices gapped higher at the open (a) but as indicated by the MACD (e), this was the full brunt of the morning momentum blast, leading to decreasing prices, which first dropped to the EMAs and finally to the 50% Fibonacci retracement level from the previous days low to the mornings high (c). Prices reversed and moved higher, gaining some momentum (f), but eventually fell through support at the close (d).

Considering the strength of the news (the tax cut deal) and the morning gap higher, the end of the day sell-off is a disappointment, indicating weakness in the rally.

Notice that prices printed a downward bar today (a) -- adding further credence to the weakening market argument, which is further bolstered by decreasing volume.

Treasury prices moved lowed yesterday. They gapped lower at the open (a), hit resistance at the EMAs and then moved continually lower, printing lower lows (b) and lower highs (c) throughout the day. Notice that momentum was negative for the whole day (d).

Prices made a big move yesterday, breaking downward support of the downward sloping pennant pattern and moving through the 200 day EMA.

After hitting resistance at the 200 day EMA, the dollar moved lower, and is now entangled with the EMAs (b). Notice that all the EMAs are essentially moving sideways, indicating a lack of overall direction in the market.