Friday, August 31, 2012

Moving Up Again On QE3 Hopes?

Finally, what everyone was waiting for, Bernanke's Jackson Hole speech (see here for the highlights). It promised to bring a lot of volatility to the market and that's exactly what happened.

In pre-market, price went higher in anticipation of the speech, creating a nice opening gap. When Helicopter Ben started speaking, he immediately brought prices down, near yesterday's closing levels. But then the dipbuyers came in and roughly an hour later, new highs were made in the major indices (except for small caps).

The market reversed back lower during lunch, but recovery came in the afternoon. Another weak and strangely volatile close ended the week, with indices losing only about 0.5% over that period.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
The euro shot higher in pre-market, like practically everything else. It traded over 1.26, but that seemed to ambitious and price came back to the high 1.25's.

Metals and oil made the best moves when the market reversed higher during/after Ben's speech. Copper didn't do that well, but gold was up +2% and silver even +4%. Oil gained almost 2%.

Have a great weekend!!

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