Hamzei_Analytics
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Posted 08:45 CST
Equity Index Update
Wednesday September 7, 2005
The index markets rallied sharply yesterday behind a sustained, session-long bid that seemed to be tied with the moderate decline in energy prices, a growing belief that the FED will be finishing their tightening cycle shortly, and that the worst impact of the hurricane is behind us. Whether or not one agrees with any of the above scenarios, it is imperative that the trader understands what the force is behind the current market movement. Breadth readings were excellent as the SP500 produced 441 advancing issues to only -57 declining. Volume in the SP500 components was over 86% on the upside.
In the short term, the index markets have seemed to "shaken off" the impact of Katrina, and rallied behind a variety of forces most did not anticipate after the disaster. Now, many participants are playing catchup and with the end of the quarter looming - one has to wonder if the normally dismal month of September for the index markets, will produce a different ending in 2005. Given the continuing global index rally and our domestic FED cycle at its final stages, the marketplace seems to be saying "go long, young man." Personally, I am not quite ready to take the full throttle plunge on the upside parade - however, I am of the opinion that once we get through this near term disaster related trade ( 4 to 6 weeks) there will be a long setup to carry into the year end.
In the micro term, I would suspect today to be a consolidation session between 1227.50 and 1237 in the SPU. Still long the front month 1225 and 1235 calls in SPU.
Good Trading to All,
Brad
Equity Index Update
Wednesday September 7, 2005
The index markets rallied sharply yesterday behind a sustained, session-long bid that seemed to be tied with the moderate decline in energy prices, a growing belief that the FED will be finishing their tightening cycle shortly, and that the worst impact of the hurricane is behind us. Whether or not one agrees with any of the above scenarios, it is imperative that the trader understands what the force is behind the current market movement. Breadth readings were excellent as the SP500 produced 441 advancing issues to only -57 declining. Volume in the SP500 components was over 86% on the upside.
In the short term, the index markets have seemed to "shaken off" the impact of Katrina, and rallied behind a variety of forces most did not anticipate after the disaster. Now, many participants are playing catchup and with the end of the quarter looming - one has to wonder if the normally dismal month of September for the index markets, will produce a different ending in 2005. Given the continuing global index rally and our domestic FED cycle at its final stages, the marketplace seems to be saying "go long, young man." Personally, I am not quite ready to take the full throttle plunge on the upside parade - however, I am of the opinion that once we get through this near term disaster related trade ( 4 to 6 weeks) there will be a long setup to carry into the year end.
In the micro term, I would suspect today to be a consolidation session between 1227.50 and 1237 in the SPU. Still long the front month 1225 and 1235 calls in SPU.
Good Trading to All,
Brad
