NY markets staged a stunning 4% rally today in the wake of a huge rate 75 pt cut and some decent earnings news from teetering investment houses. Both key indexes closed above their old support levels of 12,150 and 1320 as investors did not succumb to fear.
Although I missed this rally completely, I take some comfort in the fact that the markets are moving within the range I laid out back in January and February. At that time, I thought that the markets would be increasingly choppy especially on the downside and rallies towards 1400 on the SPX or 13,200 on the Dow wouldn't stick. So the official bear market call can stay on the shelf for another few weeks until the last gasps of air are gone which should be in April or May.
Tomorrow starts off with the Moon conjunct Saturn so it looks like an early round of profit taking. I don't foresee a big move tomorrow either way, although I think we'll likely finish somewhat lower.
I had thought the market was due for a decent rally starting next week, but it seems to have got an early start. We might see a little give back down to 1310/11,900 for the rest of this week, but next week's rally will take us back in heady territory of the old resistance levels near 1400. I don't think we'll quite get all the way back, but it will look impressive.
