By Investor’s Yak
Present observations for the Market (S&P500, NASDAQ, Russell 2000, and Dow Jones Industrial Average (DJIA)). All are now above their 50 and 200 day moving average (DMA) with the exception of the Russell 2000. The Russell 2000 is still below its 200 DMA.
Price Assessment:
- S&P500 – 3% below new yearly high prices
- NASDAQ – 4% below new yearly high prices
- DJIA – 4% below new yearly high prices
Action Zone (AZ) Assessment:
- Daily AZ’s are very extended but setting up another late stage trigger (i.e. well above 75% on the chart)
- Weekly Charts show AZ #2 momentums are at the trigger; AZ #3 price has high volume buy conviction
- Monthly Charts, still under construction for October, are triggering AZ #1 and setting up for AZ #2.
Last week, 11 of the 12 AZ stocks listed met with success. Obviously the move was further reinforced by the overall major Market indices which were also triggering their AZs. Interestingly, by Wednesday, the move peaked and reversed direction for just about all indices and stocks as well. It appeared to be the weak rally described as “Scenario 3” in our October 11 article.
However, during the very early hours Thursday morning, the European Central Bank (ECB) was hinting at keeping interest rates low. And before the NYSE opened in the United States, S&P500 Futures were already trading at prices higher than Wednesday’s close. Investors subsequently rallied the market and about two hours before the Thursday closing bell, the ECB made another announcement indicating quantitative easing (QE) possibilities by December of this year.
Between both the ECB and FED stimulating markets, there is a strong potential for a “Scenario 1” rally also described in our October 11 article.
Event calendar affecting markets in October
8 October – FEDs September Meeting Minutes
9-11 October –possible IMF announcement of China as a world Reserve Currency
27-28 October – Fed meeting
29 October – Third Quarter GDP Report
Leave a Reply