The post-Fed response was surprisingly dull. The market was actually beginning to price in a possible rate hike by Q1 of 2010, but it appears to have backed off on that and is now not expecting a rate hike before Q3 2010. I'm talking yield curve here, not stock market. To make a long story short since this is a stock blog not a macroeconomics blog, the yield curve steepened today, which indicates the market has pushed out any expected increase in Fed rates.
Short-term bias: bearish (I'm still maintaining this as bearish, if only because I'm not chasing, but I do believe we had a buying climax)
Intermediate-term bias: bearish (I still think this correction will take us lower, perhaps to 800 on the $SPX and I don't think we're ready to power higher quite yet)
Long-term bias: bullish (I believe we put in meaningful, long-term bottoms in March, and would use the aforementioned correction to increase long exposure)
Pick updates:
I sold my PALM calls today. The action from Monday was a big yellow flag to watch this position, as it was a high-volume move towards support at the 50-day EMA. The plan was to give it a little room to try to recover, which it was doing ok at yesterday. But, today, the volume was even higher, suggesting that a significant breakdown was taking place, especially on a day where the rest of the market was up. I think PALM has further downside and is off my watchlist.
Not really much of interest elsewhere on the watchlist. BAC is up big in the aftermarket on news of a big stock purchase, but that's about it. CY also had a solid rally, and this one looks buyable for a starter long position at present levels, but with room to add.
Positions: long $SPX index fund in 401k
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