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monday update
Oct 14, 2008

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Tony

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SHORT TERM: US and ECU inject capital directly into banks: market surges, DOW +936

On saturday the UK announced a massive capital infusion into its troubled banks. This followed friday's similar announcement by the Treasury. Then early this morning, it was reported that the capital infusion effort was expanded to many central banks worldwide. Recapitalizing the banks with government funds is certainly the best step, in the right direction for the markets, thus far. The impact, however, will not be known for weeks. Overnight the Asian markets surged, Europe opened higher and closed up 9.80%. US index futures gapped up in overnight trading, and remained substantially higher right into the open. At the open the SPX gapped up to 948, it closed at 899 friday. By 10:00 it pulled back to 932, near the 935 short term pivot. At 11:00 am the Treasury announced it would meet with the five major US banks at 3:00. The market continued to rally from the 10:00 low and hit 965 at 1:30, right at the important 961 pivot. A pullback followed to 2:30 and to SPX 951, then the market resumed its rally. By the 3:00 meeting the market broke through the 961 pivot and soared into the close, hitting SPX 1007. This rally, which started friday at 840, eclipsed the 131 point failed rally in September, and has now surged 167 points in 24 hours. At the close the SPX/DOW were up 11.30%, and the NDX/NAZ were up 12.20%. A record breaking day. Bonds lost over 1.5 points, Crude gained $4.35, Gold lost $23.50, and the Euro was higher. Support for the SPX shoots up to 990 and then 961, with resistance at 1018 and 1031. The important support pivot is now at SPX 912. As long as this pivot holds a new uptrend, and Primary ave B may be underway. At fridays lows the SPX hit 840, this was close to the SPX 833 Int. C equals 2.0 Int. A posted on the SPX daily chart. Let's hope this new government activity works. Best to your trading.
MEDIUM TERM: market spikes off SPX 840 low
LONG TERM: Primary wave B may finally be underway

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