- Paulson talking about a RTC- type solution (huge rally late in the day, dollar rallies, gold nosedives)
- UK regulators ban short selling in financials til jan 16, 2009 (shoots markets up midday)
- KFT will replace AIG in the dow...
- slightly bearish inventory build of nat gas
- gold continues to rally, making headlines...then slides like crazy as USD rallies
- MS, WM, STT stocks plunge on bad news...then recovers strong at EOD
Technical Highlights:
- 2 rallies occured. once on UK short selling regulations and the other on Paulson's RTC solution plan
- opened huge, fell huge way past supports, and then rallied huge to close near resistance...
- confirmation now needed, not for breakdowns but for possible breakouts and support holds...
- bottom line on technicals is that charts show a nice bounce off support but are now at strong resistance...
SPX...huge move off news late in the day brought the price back to resistance...based on history, today makes a short term bottom and we will rally from here
NDX...same story as SPX but this one holds closes above resistance to make that level now strong support. very bullish candle and hold
IWM...same deal...bounce was off support and now its stuck at a good resistance area. but as its the best performing index, watch for this to be the leading index if the market rallies tomorrow...
MDY...as pointed out, MDY really needed to hold its support to stay safe. and today, remarkably, with some help from the gov't, it saved itseld...watch for a confirmation hold and possible breakout tomorrow to feel bullish here...
XLF...this very battered up chart now looking like a 2x bottom might form. this is the leading sector as news and regulations revolve mainly around financials...if the gov't and paulson followthrough with the bullish rumors, XLF will skyrocket tomorrow...
RKH...holds off support and now at resistance...BAC is a good indicator of banks and as it ralled huge at the end with WFC making or coming up near new 52 week highs, i see RKH looking very bullish if we get a breakout tomorrow...
UUP...dollar loves good financials news and economic stability...therefore it loved the paulson news...the support did indeed hold today with slightly higher volume...the dollar might continue to kill oil and commodities...watch those charts...
GLD...rallied huge..then fell huge off financial strength. who is gonna buy gold if the gov't keeps coming out with bailouts and solutions every couple of hours? i sure wouldn't and the price reflect how most ppl wouldn't either...these safety plays are done in my opinions...anyone see NEM today? wasn't it weird to be falling when gold prices were down? was very suspicious...and now we know why...
CRB...commodities fell as dollar strengthened...despite a rally most likely coming in the markets and commodities being one of the most hardest hit sectors, try to avoid going long on these as the dollar might just crush any possible rally in these stocks...i rather put money on financials or tech
VIX...finally we got that bearish candle all these vix watchers have been looking for...everytime i saw these candles at resistance, a rally came in the market...i expect this pattern to again repeat itself....technically so much makes sense huh?
A/D...yup we got confirmation that today was indeed a rally and now just profit taking or bullshit PPT buying...first time since i used this indicator that we have confirmation of a bullish move...i would take this very bullishly...
Analysis: why even bother shorting the market anymore? i am guessing all shorts are thinking this way. With UK even trying to curb the stock market fall, i think shorts are in the shortrun dead. they can't beat King Paulson's plans...we can't fight the news...its hopeless and its time to look for good longs...unless somehow, for the first time in months, the gov't dissapoints with less intervention than expected, we will rally. And well...technically today all made sense...i just hate it as a capitalist to see all this bullshit regulations and solutions that make the market so biased towards the longs. Its not a supply and demand place anymore...its a fixed market with the gov't playing with the trends anyway they like...its all bullshit...All we can do is react and try to make sense of it. With a republican (bush) in office and another republican (mccain) trying to take office and all these economic worries helping obama in the polls, how can we possibly expect the repubicans to just let the market be left alone and fall? if they can rig the ballots, conspire 9/11, and scare us into believing we need more regulations, how can they not easily control the stock market? these guys are smart...and like be4...if u can't beat them...join them...i'm bullish as of today...but decided to hold my shorts as i think we might get a decent pullback early in the day tomorrow to relieve my shorts and to add to longs...
Ideal Portfolio: (net bullish)
before close
- dumped big short positions hopefully for profits
- hold commodity shorts as they might still fall
- bought financial longs as they will benefit the most from upcoming news
for tomorrow
- look to add to longs
- get rid of shorts if intraday pullback in markets is orderly and weak
FYI...
for added info on this RTC solution, look at the link below. was published months ago:
http://www.financialpost.com/money/story.html?id=665105
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