"Tried to run, tried to hide, Break on through to the other side..."- THE DOORS.
Will oil and gold keep the Fed on hold? Will an approach by the S&P towards 1500 keep Ben in a Box?
Oil has broken through $80. Gold has broken through $700. Let's all buy stocks in anticipation of a Fed Funds rate cut because obviously there's no inflation!
Will such a rate cut cause stocks to break on through to the other side back above 1500?Will oil and gold keep the Fed on hold? Will an approach by the S&P towards 1500 keep Ben in a Box? Is Thursday's close over its 50dma for the second time, albeit marginally, a second mouse move through this key moving average, or, will the index once again be turned back as it was on September 4th?
Many time the beginning of a new month sees the high or low in an index for the month. Did September 4th, in the least sanguine of market months, define such a high? An hourly chart of the S&P shows five waves up to test the breakaway gap from September 4.
Clearly a break of 1480ish will snap a short term trendline. The bulls would love to see a strong Friday/weekly close, which is the sign of the bull. But given the slippage this morning in the futures it appears that buy programs put on to keep the bears at bay prior to the holiday on Thursday will not do the trick into the weekend.
Because of the position of the market, and the breakdown level of the June lows having been well tested, any break of the aforementioned short term channel especially on the weekly close suggest Monday could be hard down. I still expect stock indices to see another leg down into October as most declines play out over three months.
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