Monday, December 10, 2007

Today's Markets

The SPYs opened higher on stronger volume, but then traded in a slightly downward sloping range for the rest of the day. The good news on this chart is the strong amount of money flowing into the market in the last 20-30 minutes. My guess is traders are starting to position their portfolios for a post-Fed rally tomorrow.

All the averages had a big mid-day sell off. However, the QQQQs and the IWMs below didn't rally after the sell-off. Also notice, however, there wasn't a huge move downward either. Traders kept their powder dry, again most likely anticipating a rate cut tomorrow followed by a rally.

Like the SPYs, the IWMs rallied at the opening and like the QQQQs and SPYs, the IWMs sold-off hard mid day. But notice the strong rush at the end with some impressive volume spikes. Again, my guess is these are moves to take advantage of the anticipated rate cut tomorrow.

There are several interesting points to all of these charts.

1.) The sell-offs didn't lead to a selling panic out of the market. Traders are far more confident in the market advancing at this point.

2.) There was a flow into the market at the end of trading. That's another sign of confidence about tomorrow's market.