Wednesday, March 25, 2009

Morning Update/ Market Thread 3/25

Futures are up slightly this morning with the /ES up about 4 points. Bank stocks and the XLF are up this morning after shooting probes higher just after the close yesterday on no news that I could find. More fun and games. Bonds are down a little, oil is down, and gold continues to correct on the downside, now sitting just above its 50dma.

MBA purchase applications came in slightly higher, at an index level of 267 for last week versus the prior week’s 257. The rise is mostly attributable to an increase in refinancings.

Durable goods orders came in higher than expected for February, with a rise of 3.4%. Military orders rose enough to account for 1.7%, or half of the rise. Even without that, a 1.7% increase would have beat estimates, so you have another data point that was better than expected and thus the bulls can sleep comfortable for another day.

Here’s a chart of the overnight action, right now it looks like a bear flag on the indices, but they do have a bullish tilt. Remember that we went out yesterday with oversold conditions on the 10 minute stochastic, so we could bounce in the morning, and possible have the longer term oscillators weigh on the market later:

789 is the pivot below, 848 is the pivot above, and you also have support in the 795 area and the 23.6 is at 787 which is near the 789 pivot. The upper Bollinger is just above yesterday’s high. The CMBX index came in some more yesterday, so keep an eye on IYR and the XLF to see how they react.

Make sure you review Doc's latest update, he has a bullish scenario that is very possible after just a little more pullback, so don't be caught.

Have a great day,