Is it Enough to Negate the Negative Momentum?

posted Oct 9, 2014, 9:33 AM by Katie Shook

Wednesday’s price move was huge – in many ways.  It was a classic outside reversal on the daily candlestick chart.  But is it enough to negate the negative momentum?  Maybe…

Let’s see if the SPX can clear the 50-day-moving-average (currently 1973.59) before we take a victory lap.  If irony has anything to do with it, Wednesday will mark the bottom of the pull-back.   I was looking for a market revaluation based on the Fed’s “normalizing” of monetary policy.  It looked  like the Fed may be done serving up the Kool-Aid.  Alas, after yesterday’s minutes, maybe not so much.

If you want to get a handle on the next step for the US, we should probably keep an eye on the ECB for a time.  Too much dollar strength is its own form of rising interest rate.  It’s a mixed bag of lower commodity prices (good) and lower trade exports (bad).  

DAILY DIGITS:  Yeah right.  The volatility is off the meter.  Upside resistance is the 50-day moving average.  Downside support is weak in the low-to-mid 1950′s.  Judging from my accuracy this week so far, that’s as close as I care to call it.  This week has been nearly triple the typical daily volatility range.  I’m not convinced there’s not another negative whip-saw on the horizon just yet.  If so, we could be sniffing out the 1900 level again before you know it.

WEEKLY ESTIMATED RANGE:  a little better.  At least the expanded range makes sense.  We really have had some huge swings this week…

Weeklies 10-9-14

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