Wednesday, October 31, 2007

Surge continues

The Qs came out of the gate mildly bullish above the PP and hugged the R1 pivot for the 4 hours preceding the FOMC announcement. In typical FOMC fashion, market volatility picked up just prior to the news (unfortunately, you can never be sure which way it's going to go), selling down hard on increasing volume until the announcement and then springing up to a new high at R2, with some retracement before rising to close at a new high. Notice how the 5 minute parabolics set up a nice short at 12:00, and a cover/buy at 14:20.
The NYAD stayed bullish all day, pulling back modestly to R2 at 4:15 before surging up on the news and into the close.
The TICK was somewhat more volatile, showing narrow range bars and giving little hint as to the coming action until 11:00, when the TICK pulled above the MACD histogram zero line. Volatility in the TICK actually preceded the NYAD by about 5 minutes (1 bar) and helped to confirm the rising momentum. The closing TICK was decidedly bullish at 974.

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