Stock indexes mixed today

q0830.pngThe stock indexes finished the session today mixed. The was an attempt at follow through from yesterday, but with the over-hyped meeting tomorrow where Bernanke will be speaking, the market chopped back and forth most of the session on light volume. The Nasdaq/QQQQ had a better day to the upside than the rest of the indexes. I am including a chart of the Q’s showing a different trend indicator, as well as the fibonacci retracement tool. I drew the fib tool from the low of the sell-off day to the next pivot of last Friday’s high. It looked like a resumption of the downtrend was going to begin. The market held on the first fib support line (upper green line) and has since bounced higher, and taking out the pivot (top horizontal line of the fib tool). This index looks like it is trying to reverse the pattern of the downtrend, although the close today was a little disappointing. If the market goes back under that upper horizontal line it would be a failure of the breakout. There is a potential inverse head-and-shoulders pattern on the adaptive CCI in the sub-graph. If there is follow-through on Friday, this could set up conditions for a further rally. The other indexes don’t look so positive. It is difficult, as I mentioned yesterday, to gauge these markets on the daily charts, as conditions are quite choppy. The 60-minute chart I posted yesterday had quite smooth swings. Please refer to yesterday’s post if you missed it. Anything can happen on Friday with all eyes and ears on Bernanke. I think too much expectation is being put on him to fix the mess created by underfunded speculators and people buying homes beyond their means. The market should take care of speculative bubbles, not the government. I’m sure I’d have a different view if I was talked into one of those problem mortgages. If there isn’t a hint of a lower Fed Funds Rate, then the market will probably have a nasty sell-off. It was interesting that the Stock Trader’s Almanac had today handicapped for the Nasdaq to be a bit higher, and the Dow and S&P to be lower, and that’s how it turned out. It gets it right once in a while.
gold0830.pngI haven’t had a gold chart up for some time. There is a potential series of three lower highs and lower lows. Momentum has again turned lower, and the trend channel is pointing slightly to the downside. You can see that the gold market has been oscillating between the upper and lower channels of the standard error bands. The current price is close to the middle of the range of the last couple of months. I have no idea which way it will break out of this congestion, and neither does anybody else. I would weight the probability for the near term to the downside, but not strongly so.

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