WTF!

                All I can really say is “WHAT THE F@CK”.  What I think happened is that the initial sell-off we saw when the FED made its statement came about because nobody expected the FED to react that way.  Over the last few days people were buying bonds and treasuries like they were going out of style.  With the FED’s non-reaction, people rushed back into stocks because the FED's announcement basically made the bonds and treasuries people were buying the equivalent of holding cash.  This drove the market up in the last few minuets of the trading day.

                So, what next?  Today we saw the formation of a hammer candlestick pattern (refer to my blog post “when fear takes over”).  Honestly it looked more like a baseball bat but it fits the criteria.  Now, as previously stated, hammer patterns are usually a sign of a potential reversal.  Hammers usually require confirmation, but with the size of this hammer and the volume on which it occurred, I do not think this is the case this time.  I expect the upward rally will continue up to retest the neck line of our head and shoulder pattern (see blog post “where it is, where it was, where its gona be”).

                That being said, our momentum indicators are still bearish.  The ADX is still in major bear territory, the moving averages are still in a bear alignment, and the stochastic is still pointing down.  My long term outlook is still  negative but I expect that over the short term we will see a move upward towards 1250.