10/28 - Market Analysis

SPX
- nice breakout today on mediocre volume
- resistance near


NDX
- same chart as SPX basically
- just that we get a longer term trendline resistance right on the close


30" QQQQ
- from judge the daily chart, today's action does nothing for the intermediate trend
- but zooming in, we can see how huge today's breakout was...
- the range trading finally had a breakout...and that was my buy signal...


XLF
- i had 3 signals to confirm a bullish rally to come
- XLF breaking the down trendline is #1


VIX
- the breaking if support on the VIX was signal #2


USO
- my last bullish signal, and probably the most important, was a breakout of the USO downtrend...
- we didn't get that..so we are 2 of 3 indicators...until we get this breakout, i can only be cautiously bullish and feel that we will selloff hard soon



A/D
- overall a bullish chart BUT doesn't seem to show a 10% move in SPX huh?
- the declining issues are much more than i expected from such a huge rally
- watch also the new lows as there were plenty of those
- A/D telling us to stay somewhat cautious


Analysis: The charts are telling me that today is more a buy the hype and sell one the news kind of deal...if we get a nice rally tomorrow morning, i would feel happy to sell my long position...the A/D and lack of participation in the USO suggests to me that today were rumor buyers who think that the possible FED meeting tomorrow will bring about a reversal catalyst...we haven't had 2 days of consecutive advances in a very long time, so if we can manage to do that and have USO breakout, i will be much more on board with the bulls..for now though, i have a bad feeling about this rally and see many reasons to want to fade it...asian markets seemed to have affected today's open...lets see if it does the same tomorrow as i expect the asian market to rally huge yet again...oh yah...and just so u know what i am playing technicals here, i do like a very good first profit taking at the 20MA on the indexes...i would feel good going into cash there and reloading on a pullback.

Sectors:
best - fxi, eem, xme, xlf, xlb, xlk (all rose 13% minimum)
worst - uup (dba, uga, gld, ung, slv, uso, tan, xhb, pph)

- definitely seems like the best performers were the ones hardest hit from october's onslaught...the worst were the ones that are dollar related...which kind of tells me that they dont' believe tomorrow's rate cut will help in terms of demand in commodities...thats kind of scary to me...