The emini S&P 500 had a great day today up around 14.5 pts, emini Dow up around 131 pts with bulls really coming in strong! Today was really a line in the sand day to see if this rally is for real or we where going to roll over and die. Like I said we saw the 10% correction but I was really hoping to see a 20% correction. The Put/Call ratio was over 1 showing more puts or people selling to indicate the inverse that the market looked to go higher and sure enough that's what we got. So I think we will see more hiccups with Ebola outbreak in New York and more downside but I was wrong about seeing more downside with the Bulls winning this out and continuing a 3 year rally to go higher. You can see from the daily chart below we where right at the 50 day moving average, as well as the 61.8 retracement -- so this was really a do or die kind of day to see who was going to win.
ZB 30yr bond has been a great trade to the upside and with this current pullback to the 21 ema I would say this ride looks to continue higher and the buck the inversely correlated trend with the indices to keep moving up. We will see for sure but it looks real strong to move up and test some of the crazy highs we've seen, which will be good targets to take some profits. Its nice though as bonds move up typically interest rates move down and this helps the economy specifically housing with mortgage rates going down. Not to mention Crude pushing through the $80 level has been huge for the drop in gasoline prices and looks to head lower. Here's the 30yr bond below:
Here's Gold GC chart, I would look for more downside with support coming in at the 1218 level, probably bounce some but if we can push through I would expect to test the lows of around 1191.
Markets are very volatile out there so be careful, take profits and get out. **Heads Up for Wed, 29th as FOMC Statement** from the Fed will be out at 2pm EST.
Have a great weekend everyone!
-david
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