Here is a 60-minute chart of the XLF showing a symmetrical triangle outlined in blue (click to enlarge):
The purple line gives the height of the triangle. The green line is the same height as the purple line and shows the 100% extension for a breakout. The red line shows the target for breakdown. So, the XLF is geared to either test the October 14th top, or the November 2nd bottom.
So, as The Fly says: To the FAZ-mobile!
Or the FAS-mobile. Or SKF/UYG if you prefer. I suppose that the CPI report Wednesday morning could call the direction. A little pop in inflation might make traders think that the Fed will tighten sooner, and that might be bad news for the banks. If the number is in-line, then take a look at market breadth after the open; strong breadth would give the edge to an upside breakout. Also, the swing down Tuesday morning did not reach the lower triangle line (blue arrow on chart), and that may be a bullish implication signifying impatient dip buyers.
The BKX banking index has the same triangle, however, it was able to break above the upper line during the last half hour of trading today. And both the XLF and BKX have moved above all the important moving-averages on the 15-minute chart.
Daneric’s chart of the XLF indicates that the MACD and RSI are NOT confirming the peaks, so that is a vote for down move (eventually). Can’t argue with the short term direction however, that this whole market wants to move up.
on home prices only 1/4th of the way there?
http://jessescrossroadscafe.blogspot.com/2009/11/have-home-prices-only-fallen-14-of-way.html
DRYS
Big day for DryShips today ($DRYS). I knew something was about to happen given the monster call volume during the past week (link). They announced a $117 Million debt waiver and a $300 Million convertible senior note offering for working capital, vessel acquisitions and general corporate purposes. The capital raise could weigh on the stock as it is dilutive if converted.
Julie,
Save an aisle seat on that bus for me. I want to be able to kick back and enjoy the ride.
K,
Good info on houses.
Makes me wonder if Ben is blowing bubbles with the dollar and interest rates. And, isn’t the Fed doing the same thing with housing that caused some of the financial problems in the first place with the low rates?
I reckon it ain’t gonna be perfect. Just something to catalog in the “nice to know for trading” drawer. Anything that moves the market is a blessing.
On the same page from K’s home prices link, there was an animated map of the unemployment rate progession from 2007 to Sept 2009. Very scary to watch the country deteriorate into a darker color (higher unemployment)!!!!
http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html
For those TBT watchers out there, Daneric’s chart shows that the 30 year bond hit a price channel line indicating it could be a buy and that long interest rates will move higher again. Just letting you know, invest at your own risk…
I wouldn’t mind home prices falling more as I am still waiting for my first one maybe by 2012. or just to be sure wait for 2013? oh wait one the world will end the other is a bad number. LOL
2thfixr,
Good point about long-term interest rates; the Fed doesn’t have as much control over them.
I can only suspect that there is a huge carry-trade with short-term interest rates near or at zero. That hurt a lot of folks when they were carrying Japan.
i’m still stressing a TED spread move. here is the latest http://stockcharts.com/h-sc/ui?s=$TED&p=D&yr=0&mn=3&dy=0&id=p20531334594
up 4.3% today.
still the Spread is twice as low as normal but we are gearing up
night all.