Tuesday, December 18, 2012

Morning Market Analysis

Yesterday, the long end of the treasury curve sold off on decent volume, moving through the short-term support.  The next logical target is the 200 day EMA.  Notice the volume pick-up over the last four trading sessions -- a clear negative reaction to the Fed's decision which is seen as accepting a higher rate of inflation

The financial sector had a big day, printing a very strong candle on high volume.  Combine that with the rising MACD and CMF, and a break through the 16.2 and 16.4 level looks like a strong possibility. 

The homebuilding sector is still consolidating between the 24.5 and 27 price level.  Remember the old trading adage that the longer the amount of time spend consolidating, the stronger the rally afterward.

The Chinese market appears to be making strong progress to get out of the doldrums.  Over the last few trading sessions, we've seen some incredibly strong bars printed, which has moved the market through the shorter EMAs and towards the 200 day EMA.  In addition, prices are currently right at levels established in early September and mid-October.