Stock Market Technical Analysis Blog
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After the nasty dip and rinse we had in the markets after Bernanke's speech a couple of weeks ago the stakes were high for his afterhours speech today especially after we learned from the Fed minutes of its last meeting, released this afternoon, that half of the governors wanted QE ended this year instead of ending in 2014 as Bernanke mentioned in his last speech which caused the hard market selloff two weeks ago. Since his speech today was delivered after the market closed there was little movement in the market this afternoon outside of a little futures juicing at the key moments to get indexes a little over their channel lines at the close which is not suprising.
In his speech this afternoon everything seemed a rehash until we got to the one line which was the equivalent of a bouquet of flowers, Bernanke said "I believe highly accommodative policy will be needed for the foreseeable future". Upon saying this, the afterhours S&P futures rocketed 10 points higher and the SPY a full dollar higher.
This was obviously to encourage investors to buy stocks instead of sell stocks. Whether or not this afterhours spike will hold tomorrow is yet to be seen.
Looking at the charts of the indexes to see where we are at (above) the two left side charts are 120 minute bar charts showing three months of trading in the Nasdaq & SPY where we see that today we bumped up against the upper channel line of both. In the two right charts we see that the VIX and VXX (VIX Futures) are down to the lower line of their channels, the sell stocks area.
Obviously, Bernanke's boys are trying to produce a market breakout that no one will believe and everyone will be chasing. Is it possible? We will have to see. Normally, the VIX and VXX channels rule everything but if you look at how fast and furiously they drove the market back up after his last speech selloff you have to realize that Beranke was very unhappy with the selloff occurring and drove the market nearly all the way back up. I would hesitate to call it a "rally" back up as there was virtually no trading movement intraday, they just simply gapped the market higher during the overnight futures again and again and again with nearly all of the daily candles on the trip back up being Dojis. It's possible we may be about to witness the incredible power of Uncle Ben and the boys, we will see.
Trade well my friends
Alan
