Rough day for techs and NQ lost 50 dma support as well as monthly pivot. However, we had a modest bounce at weekly S2, usually a very suppportive zone going into an option expiration week. I have to emphasize once again the growing number of puts at QQQQ 42 strike and that is supportive of a rally. Whether it starts tomorrow or later is hard to tell at this point, but at least the Nasdaq held on to 50 dma support at 2318.
As for ES, solid bounce off that neckline I discussed last week and a close above weekly pivot keeps the bullish tone alive. There is nothing in the Fed language that strongly suggests any further tightening, in fact references to a slowing economy and housing market would make me interpret their actions as being somewhat open to the possibility of rate hikes stopping here. We shall see, but the action in bonds was not bearish at the close. It is very important to watch gold during these events and YG caught a bid, suggesting inflationary pressures are still on as far as bullion investors are concerned. This group is usually very savvy and they might be telling us the Feds are done, or are not overly hawkish. If they thought otherwise, gold would have been dumped.
As for ES, solid bounce off that neckline I discussed last week and a close above weekly pivot keeps the bullish tone alive. There is nothing in the Fed language that strongly suggests any further tightening, in fact references to a slowing economy and housing market would make me interpret their actions as being somewhat open to the possibility of rate hikes stopping here. We shall see, but the action in bonds was not bearish at the close. It is very important to watch gold during these events and YG caught a bid, suggesting inflationary pressures are still on as far as bullion investors are concerned. This group is usually very savvy and they might be telling us the Feds are done, or are not overly hawkish. If they thought otherwise, gold would have been dumped.
This entry was posted
on Wednesday, May 10, 2006 at 6:10 PM.
