Thursday, January 24, 2008

Today's Markets

Today was a consolidation day after yesterday's big rally. If you look at the charts, you'll see a very tight trading range with very little movement.

Looking at the daily charts gives further evidence of consolidation. Yesterday the averages printed a large upward moving bar on strong volume. Today we have smaller bars on smaller volume. It is possible that today's action on the IWMs and SPYs formed a spinning top. But I still think we're going to see a more complete move up based on this week's panic slashing from the Fed and the possibility of another 50 BP at their next meeting.