Tuesday, November 25, 2008

Technical Picture - Consolidation Day

After two strong up days, the markets consolidated in the very upper range of the bounce. The early extension following the Paulson announcement of more FED action, left the S&P up about 17% off Friday's low and near resistance at the 50% retrace of the Nov slump and just below the 20 DMA, so it wasn't surprising to see some corrective action develop.

Another Obama press conference, (totally unnecessary IMO - those types of appointments - today's, not yesterday's - should be published in the papers. Press conf. implies that you have something important to say.) left the markets in a slow, choppy, limited drift. A mild last hour rebound allowed the S&P to close higher for the third session in a row (first time since Mid-Sept). The Dow also ended higher for the third day in a row but the two day win streak in the Nasdaq was broken amid weakness in Semi SMH -4%, Software -3%, Computer-Hardware -3%. But limited damage all the same.

Financial future & options close early tomorrow for the Thanksgiving Day holiday (13:00 ET). Not sure about equities/bonds.

Economic Calendar: durable orders, initial claims personal income/spending at 8:30; Chicago PMI at 9:45; Michigan sentiment and new home sales at 10:00 EST.

Hearing that there's another Obama press conference scheduled for tomorrow morning.

VIX continues to cool towards lower levels and the MACD crossover confirms the price action.

$USD continues to weaken and should pause for a breath at the 38% retracement of the last leg up. Gold and energy consolidated.

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