DrBob* TA Update 1/22
The Fed cut rates by 3/4 pt before the opening, resulting in a not as sharp a down opening as the futures had forecasted prior to it, and the market slowly and steadily rallied for about half the session, then fluctuated between being down slightly to being down moderately.
The market stabilized but did not scream ahead after the opening, so the capitulation at the opening was not the ideal type.
Today the internals ended negative with the NYSE a/d at 2/3, u/d vol 2/3, for a TRIN near 1.00, neutral, on heavy volume of 6.4B shares.
The Naz a/d was about 1/4, so its TRIN was well about 2.00, a negative reading, as the quality stocks in the NYSE outpferformed.
The NYSE McClellan Oscillator changed by +1, so it could portend a sharp move in the next few days, and it may be attempting to rally as some breadth momentum has dissipated a bit.
The Spx coincidentally reached the 1225 support level I have discussed, printing 1224, after having breached the higher support of 1275 without any trouble.
If the PPT and Feds are working together to increase the liquidity in the financial markets and prompting broker-dealers to have their clients and institutions accumulate (buy) stocks en masse, then the market in the U.S. could mount a choppy rally in the next few weeks.
Tomorrow's action and close will likely portend the next major move in the market, but in any case, it will be very choppy as traders are extremely nervous and won't be holding postions very long.
Bonds are overbought so there could be some rotation out of bonds as a safe harbor and into stocks which are very oversold.
The market bulls have a lot to prove in order to orchestrate a technical rally of signficance and even more to prove to reassert the bull market as most indications are that we have entered a secular bear market.
First order of business for bulls is to push this market above ST moving averages, then have several strong closes in 4-5 day period, and fight its way to the 50 dma while making a series of higher highs and higher lows in the hourly charts, and then the dailies.
We shall see,
regards,
drbob
