Today's Market was pretty impressive especially late half of the session.
Market down significantly right after open due to GSE ( FRE, FNM) concern, drag down XLF below critical support 19.9 and it down to 19.61 at low point. But it has remarkable recover in the later session. XLF end up 0.41 (2.05%) to 20.35.
By today's close, SPX gain 7 points to 1275 and Dow gain 69.
From chart, SPY has long leg bottom candle, it has double bottom in past few days at 1263 level and hold it very well despite all kinds of bad news. ( PPI, LEH, AIG, GSE, up oil price. dallor drop etc.)
VIX also drop 4%. there is no immediate sign of big threat to the down side. Very short term, S&P still attempt to go up.
But Financials has been badly damaged, even now GSC bad news has been temporarily priced in the market, XLF is still vulnerable to the down side.
So tomorrow, market is likely to go up. For next few days to next week most likely, as I said in weekly analysis, the market may up to 1320 area before sharply drop again.
At this time, it is cautiously bull but still need to trade very quick. Do not leave position over night.
USO now is up to a major resistance area around 93.9, if it break above that, then it could be a tradable swing for short term.
Dollar could has consolidation at current level for a few days before run up again.
We need to prepare for the big down days, it is approaching everyday.
The rebound start from 7/15/08 could end soon after S&P reached 1320.
Take care.
