The PowerShares DB Agriculture (DBA) has a gap up the day US announced that they are buying back US bonds over the next 6 months.
Price level held steady at the gap level and is out of the kumo resistant at around $25.
The volume is above average, however, the price has not move rapidly up.Â
This is probably a sign a knee jerk reaction to the weak US dollar rather than increasing demand.
Howver, in the long run, US dollar seems poised to go downwards further with the Fed printing more money.
S&P 500 has a distribution day on 20th March 2009.Â
We can see that S&P continue to face resistant at the 800 level. A break through above this level could suggest continuous ‘up trend’. However, we need to be careful about a continuous ‘bear rally’.
With this turn, the chart is suggesting the rally is losing its momentun.
We might see it move down and rebound off the support level at 675 (as shown by the chikou span – green line).
Most likely, we will see a rebound off a lower level, and what we want to monitor is whether the index break out of the 675 – 800 trading range.