Market Commentary for September 15th, 2011

A Look at Wednesday’s Activity:

The overall market staged a strong rally during the afternoon before profit taking in the last half hour of trading trimmed some of the gains.  However,  the overall market still put in a strong move higher in a broad based  move that saw every index I track move higher with the exception of the Gold indices.  The best performers on the day were the High Tech, Transports,  Airlines, Financials, Cyclicals, Retailers, and Energy indices.

It looks like a big factor in the markets move higher was comments by Secretary Geithner that the Europeans would not let their banks fail.  Unfortunately,  I think the voters in Europe may not be thinking the same.

In looking at the Dow Jones Industrial Average despite 3 days of moves higher it should be noted that the Dow Jones Industrial Average has basically only managed to rally to its 9-day moving average.  In other words the market has basically returned from a deeply oversold condition;  nothing to get excited about at this point.  A couple of additional days of follow through would be nice.  However,  unless the market is able to put together another couple of days of upward movement, then my concern is that when the market moves back lower it could push past the recent short term lows.

A Few Thoughts Before the Open:

In looking at the charts from yesterday’s trading activity I noticed that several of the indices I track have moved above their 9-day moving average. If we see continued follow through with a move higher today,  then we could see the makings of a legitimate rally to higher levels.

I have an early morning meeting, so I am going to cut short today’s blog.  However, before I go, a quick note that jobless claims are out today at 8:30am and they could easily influence the direction of the market.