Daily US Market Comments 26 Oct 2006 by MastersoEquity.com
FUNDAMENTALS
First of all, I must apologise for getting the date for the Fed release wrong... it was not to be on Friday but yesterday. Well, all's well went well as the Fed continued to hold interest rate rises this time round, spurring a small gain in the markets yesterday. There was a little reservation in the statement this time round pointing to signs that inflation is coming back again and if that is so, the Fed may have to raise interest rates again during the next meeting. For now, the markets have reacted favorably to the news even though it is much expected. The energy sector also recieved a great boost as oil prices staged the biggest single day rise ever. This is due mainly to the effects of the oil production cut showing up at last as an unexpected drop in crude inventories. This, along with signs that inflation is coming back again, may put some short term pressure on the markets. For now, even though oil staged a little rebound and inflation look like it is coming back, things are still not looking bad enough to turn the market around as sentiments remain largely bullish.
TECHNICALS
Markets continue to rise as expected onlong their respective trendlines yesterday.
No big surprise so as to say. Oil prices are back up and even though it was an amazing one day gain, it is still not strong enough to say it is ready to stage a reversal as it is still lingering around its $60 support level. However, if oil continue to climb today, it may complete a reversal pattern which may give it the energy to turn into an uptrend from here on. With this market rally tied very closely to the decline in oil prices, it may really come under very strong pressure should oil prices truly stage a reversal.
Ignorance And Lack Of Knowledge Is The Most Expensive.
First of all, I must apologise for getting the date for the Fed release wrong... it was not to be on Friday but yesterday. Well, all's well went well as the Fed continued to hold interest rate rises this time round, spurring a small gain in the markets yesterday. There was a little reservation in the statement this time round pointing to signs that inflation is coming back again and if that is so, the Fed may have to raise interest rates again during the next meeting. For now, the markets have reacted favorably to the news even though it is much expected. The energy sector also recieved a great boost as oil prices staged the biggest single day rise ever. This is due mainly to the effects of the oil production cut showing up at last as an unexpected drop in crude inventories. This, along with signs that inflation is coming back again, may put some short term pressure on the markets. For now, even though oil staged a little rebound and inflation look like it is coming back, things are still not looking bad enough to turn the market around as sentiments remain largely bullish.
TECHNICALS
Markets continue to rise as expected onlong their respective trendlines yesterday.
No big surprise so as to say. Oil prices are back up and even though it was an amazing one day gain, it is still not strong enough to say it is ready to stage a reversal as it is still lingering around its $60 support level. However, if oil continue to climb today, it may complete a reversal pattern which may give it the energy to turn into an uptrend from here on. With this market rally tied very closely to the decline in oil prices, it may really come under very strong pressure should oil prices truly stage a reversal.
Ignorance And Lack Of Knowledge Is The Most Expensive.
posted by Jason Ng at 9:05 PM
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