As for the markets, they are right where I left them on Friday. Quite a feat with all the Fed volatility. I almost expected a suprise, such as no cuts, but they gave in to pressure and gave us a token 25 basis points. Not for one moment did I think they would give 50 basis points. The markets are deluding themselves if they think Bernanke is not deeply concerned over the dollar collapse.
ES is building a triangle with critical support at 38.2% Aug/Oct (1509.75). I would attach just as much importance to the behavior at the 10 dma, now 1529.75, a level that was abruptly sold in the last hour. Volatility is getting up there, with the VIX facing resistance at 23.60, but clearly breaking out of the envelope. Something to keep an eye on.
We have some big gaps still open from today's drop. Many traders lost a bundle expecting a bounce into the gaps, as the markets played around for three hours with bulls and bears alike. Gaps are: NQ 2236/2251 and ES 1538.75/1553. With both semis and financials in the tank, it's not looking very rosy for bulls. They keep buying the same old big cap techs, but how long can you keep rallying on three or four stocks? We need the tech base to broaden. Watch NQ 2214 support.
Watch the EUR/USD pair for any clues on oil.
This entry was posted
on Thursday, November 01, 2007 at 11/01/2007 07:11:00 PM.
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