June 24, 2008

The market nicely filled the gap at the market open today, getting into positive territory before lunch time. But unsure what the Fed might say in their comments tomorrow, was cause for profit taking before the closing bell. On our hands, we had a weak consumer confidence report along with worries of oil’s impact on earnings next month.

Yesterday’s market analysis had us taking a dour approach on earnings, but with today’s market action and the aggressiveness of the bears at the market’s open and then again in the afternoon, we could get an unexpected buying surge, assuming the wording in the FOMC statement isn’t over the top and scares investors away. The Fed knows this and will likely be careful with every word written.

The Dow tested its lows from the day and the bulls held just as we expected. We put some capital to work at those lows, and will look for the bulls to continue to defend those levels much like it did in March, regardless if such a move can hold or not. Tomorrow will undoubtedly be exciting and should see an immediate volume surge when the Fed releases its statement at 2:15pm.

Here’s the NASDAQ and S&P Charts…