If the Dow can't rally above that minor support level it just pierced it could retest November lows, 7449.
The S&P has a chance of minor support around 805 (late November capitulation tops). However the Dow (DJIX) did pierce through that level and has been leading the overall market recently. If there's no short squeeze on an Obama stimulus injection it could retest 741 (IMO).
The US Dollar index rallied hard off of it's 50 day moving average. It has a bullish RSI reading and a bullish MACD centerline cross. It might want to retest old highs at 88.48 and then decide where to go from there.
Gold is sitting right between the 50 and 200 day moving average plus it is in a few wedges. If it can break through the 200 day and ride through the steep wedge gold could make a major trend reversal. But it could be in this 760-880 range for a while. Anything can happen though with currencies in question.
Look at what happened to Bank of America and Citigroup today. BAC saw some crazy volume spikes today on a 28% move lower. Lehman deja vu?
The XLF financial index pierced through the November lows today on some decent volume. Would like to see some conviction. Surprisingly the housing etf is 20% above it's lows. Wondering how the XLF/XHB gap will close... I haven't heard much about the homebuilders lately. Wondering if they are done writing down excess inventories and losses. We shall see.
It's interesting that the 10 year sold off at the beginning of the day but quickly recovered in the afternoon, lowering yields. The inverted hammer candle shows the rejection of the higher yields. It also looks like a 2-2.6% channel. It could retest lows but how much lower can 10 year yields go??
Can Obama's economic team reflate our economy?
"Obama Team Pushes to Complete Rescue as Stocks Plunge
By Rich Miller and Robert Schmidt
Jan. 21 (Bloomberg) -- President Barack Obama's economic team is pushing to complete a bank-rescue plan that can be twinned with the $825 billion stimulus package being negotiated with Congress to alleviate the rapidly deepening financial crisis.
While full details of the rescue haven't been settled yet, people familiar with the deliberations said the package is likely to include a $50 billion-plus program to stem foreclosures, fresh injections of capital into the banks and steps to deal with toxic assets clogging lenders' balance sheets." Full article
If they make some USD injections and the pipes don't need plumbing the reflation trade could dominate.