Wall Street Soars!

[dodjit]

After a tip toeing session the major U.S stock indices experienced rapid movement following the Feds interest rate decision, soaring higher. The major move came as Ben Bernanke released his rate decision for the month of March, stating that the Fed is going to hold their fund rate at its current 0%-0.25% level. In addition, the Fed stated that inflation shouldn’t be a problem and that they intend to purchase up to $300 billion in longer term bonds to help restore the economy back onto a healthy track.

The major mover of the session was the financial sector, increasing by over 10%. The Hardware industry also received a boost, closing the session with a 10.03% increase.

Stock markets across the globe opened higher today, following the U.S’s session. By taking a look at the traded volume on the U.S markets one can see that yesterday’s session showed a significant change in sentiment. Investors are now hoping that Ben Bernanke’s words last week could be realized, meaning that the U.S economy could see a turnaround by the end of the year.

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Even though today’s session could be characterized by some profit taking, futures in the U.S are now pointing to yet another positive start. A positive close today will make it the eighth positive session in the U.S.

Forex pairs rock

Major volatility was felt across the globe, following the decision. The Dollar index crashed to a new low, allowing counterparts to rally. The major mover of the Forex market was the EUR/USD, smashing through resistance of 1.3080. In less than 5 minutes the Euro gained over 350 pips, while the USD/JPY dropped to lower levels breaking recent range. One should take into consideration that the drop of the USD/JPY could be limited especially as the BOJ reported earlier today that their economy has deteriorated significantly and is likely to get worse due to the lack of consumption abroad.

The Euro’s break caught investor’s eyes, now waiting for a pullback to enter on the next leg up. During the month of March a double bottom formation pattern was formed on the chart, signifying a change of trend. Yesterday’s breakout confirmed the change in trend.

In addition the AUD/USD broke out of range and is now trading around resistance of 0.6862.

Gold makes an impressive turnaround

On the commodity market, Gold and Crude oil jumped higher. Gold presented a volatile session reaching a low of 883.72, before jumping to a high of 948.12. Gold is now trading around resistance of 947.50. Should a break occur, investors will observe the price action carefully especially as Gold is approaching the $1000 psychological level.

Crude oil managed to break range earlier morning, and is now climbing higher. Yesterday’s strong bullish momentum sent this material higher today, breaking a range of 3 months.

Where to now?

Even though European data showed further problems this morning, investors are now looking towards the U.S session for a clear market direction. Even though U.S futures are currently pointing towards a positive start, unemployment claims are scheduled to show a higher figure than last weeks’ and the Philadelphia manufacturing index is expected to show further weakness from the U.S economy.

One should observe the end of the U.S session to determine the direction of all of the tradable assets.

EUR/USD Daily Chart

Gold -Daily Chart

Market Pivot Points

best
enjoy

Dodjit

 

[VANTERHEYDEN]

Each Month for the seventh straight time, the United States Financial powers that be announce that 600,000+ more people are now looking for a job over the last month, the worst performance since 1982.

The number of people collecting U.S. jobless benefits swelled to a record 5.47 million, indicating employees, once fired, aren't finding other work as companies cut costs.

Yet the stock market shrugs and doesn’t recognise that each digit in these figures is a real person! There are over 5million in the USA claiming benefits and yet the US Stock Market thinks prices are low and now is a good opportunity to buy! Over half the companies listed on the DOW Jones 30 Index and the S&P 500 are overvalued – why would anyone be buying into the market at these levels?

The Financial institutions globally with their excessive risk taking have screwed the global economy over and yet many of the same flock are deciding the US stock market should be bought once again. In my opinion the market hasn’t seen the lows it deserves. Currently the S&P is at 800 and the DOW is at 7575 – these markets have rallied 20% off their recent lows in just fewer than 2 weeks – a phenomenal bear market – something which hasn’t been seen since the 1930’s. However, that is exactly what it is – a bear market rally – get ready for the market to factor in the large unemployment numbers and to resume the sell off until levels of fair value are reached.

 

[dodjit]

Regarding a bear market rally , I completely agree, and until further confirmation is given, for sure we can't say that this is a bottom. ( Most of our reports have stated that)

I don't even think that anyone can really call a bottom, but what we are starting to see is a shift in sentiment, along with improvement in other economic indicators.

Getting ready for a market drop? Well i hope you are right about the fair value part otherwise your just be adding on to recent losses.

I would see how this rally plays out before i jump to any conclusions.

good luck trading