The Day that Was - August 6th 2007

Ok.. we had a big up day. Many stocks had a rally... but don't get excited just yet. Tomorrow is a very significant day in that the FOMC meeting will set the track switch and set the course for the market train.

If you examine the SPY chart we stopped right at resistance today. There are still technical indications of a market that could still go lower. But right now the technicals will be violated if the FOMC does anything unexpected tomorrow. We have to wait and see. Today the volatility index set another new high, the highest in 4 years.

IF there is a market rally tomorrow after the FOMC statement is issued at 2:15pm then we need to watch to see if it is strong enough to indicate it is buyers coming in and not just more shorts covering their positions.

See the SPY chart: