I'm showing this chart because I think the S&P is going to open in an important area. Not only will it have reclaimed the 38% Fibonacci level from the top, it also appears that it will meet some stiff trend line resistance. Note how this trend line contained price during the last bounce. It has me thinking that no matter what Bennie and the Jets start crooning at today's session before congress at 10 am EST, there could be a sell on the news reaction.
"Rate Cut Cheers Wall Street" proclaims Marketwatch.com this morning. The way I see it, Wall Street is cheering a regime that depends on outside demand from Europe and the US that is slowing markedly.
This the first time China has cut interest rates since 2008 -- when Lehman was imploding and the world was ending. Now it's a likely a different story: the world is slowing and the stimulus medicine isn't working. But there is one thing that is always working, always there, silently lurking in the background. Gravity.
Gravity always wins.
While the S&P could gun for 1334.93 if Ben really cranks up the volume today, we've had a nice rally so far. There's no reason why it can't test lower. Below 1295s could give us 1282s.
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