Here are hourly charts of the September S&P e-mini futures, the Spiders, and the QQQQ's. I last commented on these markets here. I think the fireworks which followed the Fed announcement an hour ago probably ended the first small leg up from yesterday's low. I think this rally will carry the averages to new highs for the bull market, but I also suspect that the "base building" period is not yet complete.
The downside potential from here is to 1445 in the futures, to 144.00 in the Spiders, and to 146.90 ( a slightly lower low) in the Q's. I may well be overestimating the size of this break because I also think the longer term potential is very substantial, so I won't be holding out for these levels if we see strength above the last reaction highs which I have shown on the charts above.
The main thing to remember is that there is a very bullish situation developing and the big mistake to be avoided at this juncture is to be out of stocks.
1 comment:
I think we could see spy at 137 before we hit bottom.
This is assuming credit problems stay contained. As nervous and confused as the credit markets are I think there will be plenty of time to get down to the 137 or worse before the bounce.
I do agree with you that once the bounce comes it could be significant, but if credit tightening continues to be a problem we may be waiting for that bounce for quite a while as credit problems feed on them selves.
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