Monday, September 20, 2010

Do Your Own Homework-SPX Update

'Buying Gold is an excuse for people not to do their homework.'


SPX: 1 Year Daily Chart:

Another day another dollar: that is true if you were long the SPX in U.S. trading today. The SPX rallied 1.45% to 1141.92 on the session led by Energy, Consumer Discretionary, and Industrial stocks. Many Tech bellwethers displayed robust performances as Google rallied 3.7% to 508 and AAPL closed above 280 up 2.85%.

Pop Quiz: Why did equities rally today class?

a. President Obama's Town Hall assured investors America is "The Greatest Nation"
b. The SPX broke resistance of 1131
c. Japanese Markets were closed
d. The Tea-Party will uproot American Politics
e. No significant economic data released
f. I forgot how to take these tests

The answer is probably a combination of b, c, and e. The S&P finally broke out of its uninspiring trading range on light volume. Though, this may be short lived. Early in the session gold rallied to new highs around 1284. However, these gains were unsustainable. In addition, agricultural commodities, base metals, and Natural Gas led commodities lower. The USD failed to sustain any gains against the Euro, Sterling, 'Aussie', and CHF. Also, the bond market lacked bullish convictions. Alas, capital flowed into equities by default.

October Nat Gas:1 Month Chart

December SPX E-mini: 1 Month Chart

We took advantage of the sharp sell-off in December Nat Gas contracts and entered a long position as prices firmed. Also, we are long the Dollar vs. CHF. U.S. Housing Starts come in at 08:30 and The Fed decision is at 14:15 EST. We expect equities to pair some of their gains in tomorrow's session.

Patrick M. Ambrus
Twitter: AnalyzeCapital

Sources:,, VanityFair

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