The SPX had a short covering obviously as today's market is locked in a narrow range. Basically, the FED's rate cut is priced in and 50 BP should not bring markets higher but the prospect of more cuts might be carried out as a reason to bring the SPX to 1000/10. Although the 990 is a hurdle as well, if we go up from here. In any case, we have to come down again - the question is really how high and long does this upside correction go and last? The last 2 had a 3 day span - the difference now is that the EURUSD seems to have finished a downleg and hence turned commodities around as well, which gives more support. The Rydex around .74 is not on oversold levels, rather on a sell level. we have to wait and see how the market deals with the rate cut (and it's magnitude). Volume is moderate so far and the VIX 13 really marked a high in volatility as expected.
Wednesday, October 29, 2008
SPX technical update
The SPX had a short covering obviously as today's market is locked in a narrow range. Basically, the FED's rate cut is priced in and 50 BP should not bring markets higher but the prospect of more cuts might be carried out as a reason to bring the SPX to 1000/10. Although the 990 is a hurdle as well, if we go up from here. In any case, we have to come down again - the question is really how high and long does this upside correction go and last? The last 2 had a 3 day span - the difference now is that the EURUSD seems to have finished a downleg and hence turned commodities around as well, which gives more support. The Rydex around .74 is not on oversold levels, rather on a sell level. we have to wait and see how the market deals with the rate cut (and it's magnitude). Volume is moderate so far and the VIX 13 really marked a high in volatility as expected.
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