In both directions! The DOW fought its way back to even, being led up by the financials and short covering kicked in causing a little parabolic move up. The 10 minute stochastic reached oversold and looks like it’s about to roll over.
The /ES and SPX ran right back up to the 850 level and have so far been stopped there. I want to point out that even IF the financials rally here, for whatever reason, that leadership will be temporary just as the leadership when the homebuilders began their multiple false rallies earlier. It is obvious that the damaged sectors are rolling from one to the other. We started with “subprime,” moved into home builders and all industries centered around “home,” then the financials felt the pain and have been beat down, but it is now the REAL ECONOMY that is indisputably being whacked.
The current crop of bottom fishers, like the ones before them, now see that an official recession has been called, they see HORRID employment numbers, and they use the old “can’t get any worse, the markets lead the recovery,” logic. Careful with that logic, the MATH does not agree.
Below is a 10 minute SPX chart. Note that the 10 minute stochastic is starting to roll over and there is a topping candlestick. The 30 minute stochastic, however, has much room to run upwards, so the battle in neutral ground continues. I can also see a potential 5 waves off this morning’s bottom, so be careful, my stance is neutral at this point as both bullish and bearish scenarios are still on the table.
Here is a view of the DOW weekly so you can how that situation looks prior to the close:
It's "bank failure Friday," Who wants to hold over the weekend in this casino?
Dallas Fed Soars For 6th Straight Month To 11-Year Highs
11 minutes ago