Tuesday, November 6, 2007

Today's Markets

As the two day chart shows, the SPYs are rallying upwards. The markets got a jolt yesterday around the 149 level with heavy volume buying. My guess is 149 was an important level for some computer programs.

The 5-day chart shows a two day consolidation between the 149.40 and about 151. We also see the market's broke out of this range at 2PM CST today on good volume.

The six month daily chart shows some interesting points. First, we have a possible double top, with the first top occurring in early July and the second occurring in early October. These levels are near record highs for the S&P which have provided top side resistance for the last four months. As I mentioned in this post over the weekend it's looking like that area will provide stiff upside resistance.

In addition, we may have a triangle consolidation pattern forming over the last few weeks. This would make sense given the overall uncertainty of the financial markets right now. While the last Fed statement alluded they would not lower interest rates again, the recent news from the financial sector may still fuel the bull's hopes. This would give the market some upside pressure. However, record high oil prices along with concern about Christmas will give the bears ample ammunition. In other words, there are still decent arguments from both sides of the street, putting the market squarely in a trading/consolidation range.

Like the SPYs, the QQQQs show a two day consolidation pattern and a break through upside resistance in today's session.

However, the QQQQs daily chart shows a rally still in place. The simple moving averages (SMAs) are all heading higher, the shorter SMAs are above the longer SMAs and prices are still above all the SMAs.