The culprit for the rally was Ben Bernanke who today announced that IF certain economic trends persist (namely, slow growth) then further economic stimulus MIGHT be necessary. He also indicated that the Federal Reserve would be willing to step in and provide said stimulus, though he gave no firm commitment.
Be sure to read the write-up on this I posted to the blog earlier today.
In any case, I'll continue to trade the technicals and right now we're still in a middle range on the major indices. I'm still holding a couple of small short positions from last week which I'll continue to hold until we reach my target (20MA on SPY daily) or I get stopped out. But until we have a clear direction on this market, I'm very hesitant to initiate any new long or short plays. So far, the SPY has bounced off of daily support levels after the down-move of late last week and early this week. Technically, this is just a bear flag so I'll continue to maintain a downside bias.
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| Two slight bounces after big down days on SPY |
Intraday, the SPY was all over the map. It opened the day at 132.09, up considerably from yesterday's close of 131.40. From there, the announcement from Bernanke sent it all the way up to 133.22, after which it had a steep fall back down to 131.52 before getting a small bounce into the close. The SPY ended the day closing at 131.84. This was very much a repeat performance of yesterday, just with more volatility.
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| Fading the QE3 announcement |
Stay tuned to this blog and to my twitter feed as I keep you updated on this market. I know it's been quiet here in terms of giving out trade setups, but I have a feeling things should start to heat up once we hit key levels. I'll continue to let the charts be my guide and fill you all in as it happens.
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