welcome back to the Stockchartsrus Blog.
On a day where the US Federal Reserve Board cut its short term interest rate by 75 basis points the S&P 500 rallied more than 4 percent. As the chart above suggests, the lows of January have been tested and the 4 year business cycle moving average has held. While it will take a close back above $140 on the SPY's to register a weekly buy signal, the market has registered daily buys suggesting a seasonal bounce. The fallout from both a collapsing US housing market and the subsiquent mortgage backed securities debacle has claimed its first (and the market hopes) the last victim, The Bear Stearns Company. The stock topped out during the housing mania a couple years ago above $150/share. Over the weekend it was announced there would be a mercy takeover of the company by JP Morgan at $2/share! Isn't capitalism wonderful....
In short, no reason to get bullish yet but maybe the worst is behind us...
Until next blog,
Brian
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