Coolhand's Market Analysis

A funny thing happened as Fitch downgraded several major financial banks to include Bank of America and Goldman Sachs. The financial sector rallied. It ended the trading day up about 0.5% overall.



After hours, the downgrades continued with Moody's dropping Belgium two notches to Aa3.

Earlier in the day, the consumer price index in November was released and showed no change. Economists were looking for a 0.1% increase. Excluding food and energy, the CPI was up 0.2 percent. That was a bit higher than the 0.1% rise analysts were looking for.

Today's trading activity saw some above-average volume, which was not unexpected given the quadruple witching options expiration.

So what will next week bring now that the market has retraced some of the losses incurred earlier in the week? I can't point to the last two days of gains as reason for optimism as OPEX influenced trading activity.

But the big run up by treasuries may be giving us a clue. The yield on the benchmark 10-year Note fell to a two-month low just south of 1.85%. It had been struggling to get below 2% for a time. It's obvious there's been a short term run to safety, but can the market build on its recent gains and trigger a SC rally? Time is growing short.

Here's today's charts:



Back to buys for NAMO and NYMO, but they still remain in negative territory. I'd like to think though, that they're on their way back up after this week's relatively low reading.



NAHL flipped to a buy, while NYHL remained on a sell.



Both TRIN and TRINQ are in buy conditions. They also remain somewhat neutral.



BPCOMPQ tracked a bit higher today and remains in a buy condition, but as you can see the lower bollinger band has risen higher, which would make it very easy for this signal to flip to a sell with one more good day of selling pressure. But for now it remains on a buy.

So the signals remain mixed and neutral overall. Officially, the system remains in an intermediate term sell condition.

Our sentiment survey remains in a sell condition. And that sell has been long lived as the system has been in that condition since the week of 10 October. But that hasn't stopped this market from rallying from time to time so there's still a good chance for a SC rally to materialize.

I'll be interested to see what the tracker charts show when I post them later in the weekend. See you then.