Midday Analysis / Holiday Trading
by
, 10-10-2011 at 12:16 PM (1903 Views)
Today's holiday rally is pushing the S&P 500 up to the bottom of the bear flag again. We are also testing the 50-day EMA so this is the area where we thought any rally would run out of steam. So far it has not been able to push above the resistance but it is holding and it may need another day if it is going to break through.
Not surprisingly, this rally is coming on light "holiday" trading volume. Yes, it is not a holiday for the stock market but the banks and the bond market are closed and many investors are staying away.
Here is the volume through 1 PM ET compared to the prior 5 days...
The question is, how much can we trust a strong, light volume, holiday rally that was triggered by more optimism from Europe?
I will be surprised if this rally continues the rest of the week, but if the bear flag and 50-day EMA resistance is broken I will have to change my outlook.
Just a reminder that today's action will be combined with Tuesday's to come up with the TSP share prices, since the TSP will not be posting share prices tonight.