Here is the hourly chart for the NASDAQ 100 (NQ Z0-60min). If resistance can be cleared, then look for the rally to continue. If 2164 is taken out, then look for more pain.
On the daily chart, the 30-year US Treasury (ZB Z0-D) has hit the support level I have been looking for. There is the potential for a pretty meaningful reversal from right about here. It needs to trigger. If support here fails, then this correction in bonds could get real ugly, real fast.
The yield has already rallied from 3.5% to 4.3% since September 1st (the day QE2 was announced). A move to $120 would put yields in the 4.7% range. Remember what I have been writing, that under QE1, there was a spike higher in yields, followed by a narrow trading range. The trading range on the 30-year Treasury was about 12% last year, so if you bought them wrong, you have some serious pain. If you bought them right, you had a nice year.
Today’s auction of the 30-year and the POMO purchase schedule announcement will probably have a big impact on bonds today.
Commodities had a very rough day yesterday, with several gold/silver stocks reversing 10% intraday. It was a news-driven event, as the futures exchange decided to raise the margin requirement for trading Silver. By definition, this sucks liquidity out of the system and lowers demand. The volume on the Silver ETF was about 25 times average! After a parabolic move, that is normally not a good sign. Commodities will have to be watched very closely here.
REITs also had a very ugly day yesterday and will need to be watched closely.
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