Another typical day expected on Wall Street. The tax cuts made in 2001 and 2003 were extended for another 2 years for everyone, while unemployment benefits were extended for 1 year, but 4 million unemployed workers will still see their benefits stopped. With unemployment reported for U3 at 9.8%, and U6 at 17%, the news that 4 million unemployed workers have lost benefits is greeted as good news, driving the equity commodity and PM markets higher.
Oil blasts past $90 to trade at $90.60. Gold trades at a new high at $1,428, Silver explodes through the $30 resistance to trade at $30.78, the Euro strengthens to 133.80 while the dollar is broadly lower against every major currency. And the Fed continues to monetize the national debt, yesterday purchasing the long bond issued just 1 month ago. The QE2 bond purchase program is so successful that the 10year is down over 1 point and the long bond is down almost 2 points. Not!
And the first call has the market up 80 Dow Points. Welcome to Wall Street!
Our proprietary Momentum Change indicators generated a new Buy signal last Wed, but the gap open, and subsequent market strength has not presented a buying opportunity. I hate it when a trade signal does not at the same time offer a tradeable entry opportunity.
We have several historically reliable timing tools that are suggesting a short term market top is to occur this week, perhaps even today... so we expect to either see a pull back shortly to present a buying opportunity or a Momentum Change signaling a new direction for the market. We are currently flat.
Best to your trading!
Bill
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