| Weekly Market Outlook – April 27, 2009 |
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Earnings reporting season continues this week, and several regular economic reports are due ... but the big event of the week is likely to be the 2-day Fed Meeting, with the announcement due Wednesday April 29th at around 2:15 pm Eastern Time. Fed rates are already near zero, but last month they announced a giant $1.2 trillion infusion into the economy -- the Fed is not expected to make as dramatic a move this month. Also keep an eye on the comments the Fed makes and the market's reaction to them in the following day or so, as that is often significant.
As you can see in the S&P 500 Index (SPX) chart below, Daily Percent R is still in bullish mode after 2 recent successful re-tests. However Efficiency Ratio is beginning to lag and 900 is potential overhead resistance on this Index, so some caution is in order.
SPX Daily Chart

The NASDAQ continues to be an outperformer, as we have mentioned several times previously - see the QQQQ vs SPY chart below. Remember that the QQQQs have a large weighting in growth areas such as Technology and Biotech, while the SPYders are more diversified, but have a large weighting in Financials and Energy.
QQQQ vs SPY Performance Chart

The CBOE Volatility Index (VIX) is in a 35 to 40 range currently. Be cautious if it soon approaches its Bottom Bollinger Band and Bottom Acceleration Band, as that may indicate too much complacency among option traders and mark a point of short-term market weakness.
VIX Daily Chart

Bottom Line: Underlying bullish indications are still in place, with NASDAQ type stocks showing the most strength. However, we are not in "all clear mode", so avoid "irrational over exuberance" of a continued market and economic recovery.
Trade Well,
Price Headley
BigTrends.com
1-800-244-8736
Price Headley is the founder of BigTrends.com, which provides
investors with specific real-time stock and options strategies and
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