Today’s price action was typical for a Fed annoucement day. Sideways trading dominates the trading day until volume dries up several hours before the Fed announcement at 2:15 EST and then the market vacillates widely for a half hour after the release followed by a directional trend into the close.
The trend that lasts until the close is often reversed over the next few trading days. Chasing the trend can be risky. The S&P (SPY) and Dow (DIA) are “very overbought” while the Russell (IWM) and the Nasdaq 100 (QQQQ) seems to be struggling with some decent overhead resistance. I would not be surpised to see a reprieve over the next few days followed by the seasonally bullish end of month/beginning of the month period. As we move closer to the mid-term elections I will have some other interesting seasonal tendencies.
Sorry about the short posts, I am working diliegently on the new newsletter. The newsletter will be more comprehensive and we are offering a few additional models including our first stock-only model portfolio. Our goal is to educate the “little guy” on alternative investment strategies and capital preservation techniques by allowing them to follow our model portfolios. Hopefully, subscribers will find value in the newsletter. I have certainly worked hard to create a quality product. The first issue is out on Novermber 1st.
RSI Wilder (5) for October 25, 2006
- SPY - 91.6 (very overbought)
- DIA - 89.1 (very overbought)
- IWM - 71.0 (overbought)
- QQQQ - 65.7 (neutral)
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- Andrew Crowder, Investment Strategist, Crowder Investment Research, LLC