The chart above shows that the market continues to trade between the 200 and 50 Day moving averages. These averages also coincide with the opening range target numbers of 1476.76 and 1453.09. This area could hold until we get closer to the fed meeting on September 18th.
That being said, looking for a short term rally today on the anniversary of September 11th, 2001 might be in the cards. The Nasdaq 100 Index-NDX has been the stronger market as of late on up days. It is not effected by the weakness and uncertainty in the financial sector as much as the broader S&P 500 Index. The NDX is sitting at a 50% re-tracement level of its recent rally and is also right above its 50day moving average. The second chart below shows this level.
NDX - Nasdaq 100 Index
NDX - Nasdaq 100 Index
The chart of Goldman Sachs might hold a clue as to the short term market direction. With last Friday's weak market, it held relatively strong, and seems to poised to try to make a move. It is hard to tell what kind of power this rally might have, but it could be fueled by short covering as well as bargain hunters. With the news that Bear Stearns is attracting large investors and take over talks, this sector could see a relief rally and take the over all market with it.
GS - Goldman Sachs
Below is a chart of the S&P 500 Index with the top pane showing the percentage of stocks above their 200 and 40 day moving averages. This shows the internal strength the market has. The percentage below their 200 and 40 day moving averages is below 50%.
S&P 500 % Above 200 and 40 day moving averages
Some currency charts to show the lack of confidence shown last Friday with the employment numbers and the holding pattern we are currently in.
USD/CHF
EUR/USD
USD/JPY
Following the currency markets overnight can give a clue to what the equity markets might hold for the day. There are many free demo trading forex accounts, but the charts posted here are some of the better ones I have come across. They are available through fx solutions. There is a link to their site just under the Blog Archive to the right of this article. The free demo account is worth doing just for access to charts and the 100 or so indicators they offer.
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