What a month we've had!
We're still only about halfway back to where we were in the summer but, WOW!, quite the effort has gone into rescuing this market from certain DOOM!!! at our 1,850 predicted floor. I would have been a lot happier seeing some healthy consolidation down there before we raced back to check out the 22-week moving average, which just so happens to be sitting right on that 2,000 mark but the 200-day moving average is at 2,023 – so no excuse for getting rejected here, other than psychological.
If you expect your technicals to work (the 200 dma), then you don't want to see psychologicals having a great effect or it means your technicals are BS (they all are) and you have no idea what the market is going to do. As you can see from our Big Chart, all of our indexes are well above their 50 dmas and looking to challenge their 200 dmas, let by the Dow and S&P, who only need to cover 1% to hit their goals.
We're waiting on the ECB to announce a new stimulus package and this isn't one of those times where Draghi is likely to get away with his usual "all talk, no action" statements as, just this morning, German Factory Orders slipped another 0.1% (was -0.2% last month) and that's not going to get us back to the critical 10,000 line on the DAX (now 9,727) which is still 10% below the critical 11,000 line (Must Hold) which is still miles below the 12,500 high they hit just 12 months ago.
So, to recap, the German Stock Exchange is still down 22% from it's highs last year and the Nikkei is still down 20% but the S&P is down 5% and we're expecting a rally if the rest of the World is still technically bearish? Come on people – get realistic! If you want to be an effective short-term trader, you have to learn to have realistic expectations of how much an index, and the stocks within the index, should move given different data inputs.
Speaking of data, if you want to see something scary, check out Deutsche…