Trade the Cycles

Friday, March 07, 2008

......."Fed Takes New Steps on Credit Crisis"

"Fed Takes New Steps on Credit Crisis," see http://biz.yahoo.com/ap/080307/fed_credit_crisis.html.

"The Fed also said that starting Friday it will enlarge another series of transactions, called repurchase agreements, so that they will pump a net total of $100 billion into the financial system at any one time."

The program traders will love this. The Fed has been aggressively adding credit since Thursday 2-28, see http://www.federalreserve.gov/releases/h41/Current/ and see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE.

It looks like SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) put in a short term Wave 2 cycle low just after today's open, see http://finance.yahoo.com/q/ta?s=%5Espx&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c, and note the large bullish inverse spike. Normally a short term downcycle only lasts a few days, this one lasted over a month.

The WMT Lead Indicator was an extremely bullish +3.07% versus SPX yesterday/3-6, was a very bearish -1.16% versus SPX on 3-5, was +0.31% on 3-4, +0.56% on 3-3, +0.52% on 2-29, -0.53% on 2-28, +0.15% on 2-27, +1.44% on 2-26.

Watch SPX's upside gap at 1333.70 from yesterday 3-6's open, and, watch WMT's upside gap at 50.70 from Friday 2-29's open, that should/might get filled in the next day or two.

Wave A intermediate term (Cyclical Bear Market began 10-11-07 for SPX, late October 2007 for NDX, late July 2007 for RUT) cycle lows occurred on 1-23 for SPX/NDX and on 1-22 for RUT (Russell 2000), so, SPX/NDX/RUT are in a countertrend Wave B minor intermediate term upcycle.

....... http://www.JoeFRocks.com/ .

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1 Comments:

  • Walmart (WMT) has a bullish breakaway gap at 49.55 created at yesterday 3-6's open. The WMT Lead Indicator is bullish early today.

    By Blogger Joe Ferrazzano, at 7:26 AM  

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