With todays big move on higher than average volume. I just wonder what the general idea is on where the sp-500 is going in the near future? Todays candle pattern is a hollow candle that opened on the low and closed on the high, generally thought of as bullish, especially when consiered with the higher than average volume. So for conversation sake and an attempt to wake up these forums with constructive conversation. Maybe some of you would lilke to add your market comment? Thanks Rick Haines
Can’t say much about the S&P but for the USD/JPY pair which has a high correlation with the Dow we have a strong daily reversal from the drops all through March. Would like to see the week ends though before casting judgement on a turn in these markets. If the markets decide that a 75 bp cut wasn’t enough, we could see things slide back down. Gold markets showed a massive reversal day yesterday, so capital is definitely floating back to the equity markets.
I don’t much agree to technical analysis when trying to predict long term market moves. Your question, Richard, is more of the short-run. The market is data driven. The liquidity injected by the Fed may show positively in the data this month this time next month. It won’t be until April that the liquidity and the tax cut stimulus package will really jump-start the economy. The irony is, no one will see it coming when the data gets release in May, and even the GDP numbers from these infusions will not be seen until July and will probably surprise analysts. It is all about the data. Wall Street, when it sees good trends in the data, moves until they think otherwise, and is why most recessions are anticipated and show in equity prices prior to the period actually being classified as a recession. You have no idea until after the fact whether you are in a recession until it is actually described as one. My opinion says yes to being in a recession, but I have imperfect information. I can only anticipate that the decreases in lending rates as well as the tax cuts will point the market higher certainly by June and on an upward trend. It’s all about the data, which we won’t know if our situation has improved until May. The market feels this way about Data. Get good data in June and July and the market will be setting new highs in no time. No amount of technical analysis is necessary for periods that long. Shorter term, to a few days out, is probably higher in anticipation for all of the changes to the data I have described here.
