S&P to 1600 and then new highs?

I would not be surprised if S&P500 reached 1600 and then go on to make higher highs. The first target is within the reach of a hand. The second one is a bit more complicated. The resistance at 1600 level should be pretty strong. However, the mere fact that the index did not fall below 1540 shows that market bulls are still very strong and are ready to buy on dips.

That's why I expect the uptrend to continue in stocks. All fundamentals somehow have short term effect and markets get back to their primary trends when the heat of the news disappears. In my opinion, this time will not be an exception. The stock index will definitely try to go higher. We will see if that becomes a reality.

See you soon.

The course for markets set today

The course for the immediate market movements across the world will be set today. FED rate release is one thing and it has already been posted. Press conference held by FED chairman Ben Bernanke is another thing. We do know that he will be stepping down from his post sooner rather than later and we do want to know what will be next steps of Federal Reserve. Will bond buying program continue or not?

Let the chairman tell himself. His speech is scheduled at 18:30 GMT, which is in a matter of a few minutes. Do not be troubled the world will not end, but markets will be very volatile for the next upcoming hours and possibly till the end of the week. US dollar is expected to rise. It seems that the Japanese Yen will continue falling and stocks may recover.

See you tomorrow.

Markets may get wild soon

Markets are known for being wild sometimes. This is becoming a rule rather than exception nowadays. And it can  be said about any market now. Stock indexes have been jumping up and down recently and you should definitely expect this continue. When FED announces their rate decision sparks will definitely start flying in all directions.

Watch what happens to S&P500 or Japanese stock index. They are going in both directions like crazy. And theses swings will probably get wilder on Wednesday when the rate decision is announced. Nobody knows where US dollar index will go. I bet it will go up. Gold and silver will probably be down. Japanese Yen should rise. British pound to rise too.

Anyway, let us wait for the day and let the market to decide.

Australian dollar oversold like never before

Well, maybe I exaggerate a little. There have been much worse times. However, Australian dollar hasn't been so oversold in four years. The worse time was only when the 2008 crisis hit financial markets. Now, being aussie at these levels one naturally wonders how far it can go. In my humble opinion we are about to see a bounce. I am not sure if that will be a major recovery, but a week or two of bullish action on behalf of the currency should take place.

Unfortunately, there is no enough fundamental back up for such a position of mine and I would prefer to wait for the employment data from Australia on Wednesday. This might show what stage Australia job market is in and whether the Central Bank of Australia is going to lower interest rates or not. If the data is bad, no risk aversion will come into play for the time being.

US dollar index at resistance

US dollar index was going down for about a week and rallied sharply on Friday when NFP data was released. If you look at hourly chart you can clearly see that it has hit resistance and is kind of reversing now. For the time being the scenario remains bearish. However, this can change any moment if 10 700 level is broken upwards. Critical support level is at 10 520 level. If that holds and that is also very likely we are going to see double top pattern in US dollar index taken away and new highs made for 2013. The next couple days will be critical and define the direction of the security.

US guys are happy after Friday job report

American guys should be happy now. Bernanke's plan is working. Jobs are being created. Stimulation did not go in vain. Maybe. However, will the trend continue? What happens when the plan of artificially pumping economy stops? Will stocks crash, currencies go in turmoil and God knows what happens to commodities? Maybe. Anyway, the news was good for stocks, US dollar and Canadian dollar. Commodities crashed sharply, except for oil. This security is very much in correlation with Canadian dollar and if Canadian economy is ok, oil is doing well.

Let's wait and see what the next week brings.

Business week financial market analysis

Just wanted to give you a back link to quite good analysis of financial markets done by businessweek.com. Hope you will like it. I will proceed with mine in a short time.
http://www.businessweek.com/markets-and-finance