Dec 15

The Market Today


The pull back after the Fed announcement continued. While it went down, it did not go down to the next support, which is 1397. The next support is 1383, then 1343. There are some bullish arguments that are pretty compelling. Examples, we have interest rates moving higher, which can be construed as being positive of the economy, as well as the allocation shift from bonds to equities. Second, the dollar has been breaking down. The dollar closed at $79.67. Should it break the $79.50 level, it should move down to $78.93 level. Typically, when the value of the dollar moves lower, equities move higher. However the momentum has left the market in a big way. The fiscal cliff issues have taken over the market. One thing to keep in mind, even if they find a solution to the cliff, we have the debt ceiling issue in February. That really is the bigger issue in my opinion. Back to the cliff, if a solution is not found by Christmas, expect the selling to gather steam, and take this market significantly lower. These are very confusing times. There are several bullish setups. Should you decide to go long, be sure to follow up with stops, tight stops. Trade disciplined, and stay tuned…

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