Thursday, September 16, 2010

Yesterday's Market

The treasury market is clearly in a downward sloping pennant pattern, making a disciplined move lower (a). Also note that prices are bouncing between the EMAs for technical support and resistance (b).

Yesterday, Treasury prices gapped lower (a), but rallied just above the previous days highs (b). prices couldn't maintain the upward momentum and started for move lower for the rest of the day, with prices rallying a few times into the EMAs (c). At the end of the day, prices consolidated in a triangle pattern (d) with some high volume totals (d).

Notice that SPY prices are right in an area of key resistance (a). If prices can move through these levels, the index has some upward room to move.

Yesterday's action had three key segments: a rally (a), a fallback to Fibonacci levels (b) and then another rally (b) that ended on high point with strong volume (c).

Notice the the transports are still below key resistance levels (a).

Remember that stock prices have been hampered by the Treasury market's rally. But with the Treasury market falling, we may now have enough ammunition for the market to move higher.

Gold stalled a bit yesterday, and is still at important resistance levels (a). Ideally, we need prices to make another strong move above this level in order to move higher.