Thursday, September 8, 2011

Before the US session opened, there was some important economic data to take into account: ECB left rates unchanged at 1.5%. As a reaction, indices came down about 1% in pre-market.
Jobless claims were weaker than the forecast, not helping the bulls.

Further interesting news comes from OECD Chief Economist Pier Carlo Padoan. He made the following statement: “Growth is turning out to be much slower than we thought three months ago, and the risk of hitting patches of negative growth going forward has gone up.”  In other words, a recession is nearby. Read the entire article here.

The morning open came with a rally towards the overnight highs, which remain resistance for now.
During the session, there were 2 important speeches, one from Obama and a second one from Bernanke.
While Obama suggests payroll tax cuts, Bernanke claims the Fed still has some tools left to save the economy but he admits problems are more than just temporary (and worse than they assumed). After that, the market tanked a quick 6-7 points to the pre-market lows (support). The bounce was rather small and soon we were back at the lows and now breaking them.

Consumer credit was very strong, $11.9 billion beating expectations of $6 billion. No real noticible reaction to the number, indices were still going down, just under the previous mentioned pre-market support. Bulls tried to stage a rally in the last hour, but bears fought back and we ended near the low of the day.

On the SPY-chart, we notice a diamond-top pattern on the 5min-chart:

An update of the DIA-chart, we're basically in the middle of the range.

Big divergences between the indices, small caps were underperforming, NASDAQ doing a bit better than S&P/DJIA.

Gold and silver rallied after yesterday's decline. The dollar is up from it's pullback yesterday, the euro is very weak and dropping further towards the July lows. Under those lows and the euro could travel much lower, possible target 1.30.

I took partial profits on MCP @56.94 and @58.50 (1R and 2R). Letting half my position run with SL at breakeven. BAL is moving nicely, SGG is holding up ok for now.

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