Thursday, September 23, 2010

Yesterday's Market

The area in the rectangle clearly shows the markets trading range for the last few months

Yesterday, stock prices closed below two important technical support levels (a and b).

Yesterday prices gapped lower at the open and then rallied to levels established yesterday (g). volume decreased as prices moved higher (d) indicating a lack of enthusiasm as prices rose. Prices then moved lower until then hit support at (f) (yesterday's lows) , and then prices moved lower (c) on increasing volume (e).

The 7-10 year Treasury is right below important levels, while

The 20+ year Treasuries are above important levels.

Notice that as the Treasury prices rise the stock market looks less interesting. This has been a common theme for the last few months.

Cattle -- which was in a strong uptrend (A), has printed a double (B and C) top and broken the uptrend (D). Prices are now sitting at the 50 day EMA (E). Also note the MACD has given a sell signal (F).

The lumber market -- which had a consistent downtrend earlier this year (A) is still consolidating in a base (B). The market is obviously strongly influenced by the housing market.