Stocks rallied on Tuesday in a volatile session as investors struggled to decipher the Fed's signals on the economy after a dizzying two-week slide.
Buying accelerated into the close and the S&P 500 posted its best day in more than two years, following a drop of nearly 17 percent over the past weeks.
The market reversed direction six times after a Fed statement that pledged two more years of near-zero interest rates.
The Dow Jones industrial average gained 429.92 points, or 3.98 percent, to end at 11,239.77. The Standard & Poor's 500 Index rose 53.07 points, or 4.74 percent, to 1,172.53. The Nasdaq Composite Index added 124.83 points, or 5.29 percent, to 2,482.52. (commentary & photo courtesy of Reuters)
The market gyrations of today led to of the RSI portfolio positions to hit their stops. This now leaves only one position in base metals ETF (DBB). We are now awaiting RSI’s next buy recommendation. Cash reserves are now at an all time high and they are awaiting an opportunity to be put to work again. With all this market chaos, there should be some plump opportunities ahead.
And as if on queue, RSI pumped out a dozen Buy signals. They are:
Only three of these picks are straight short funds. The remainder are 2X short, so be careful of the extra leverage these funds employ. I don’t have the capability to present charts for all these funds, but let’s examine the price action for the first pick, which is representative. SDD has been in a parabolic updraft with a sharp decline today. RSI’s price excursion module likes that price action. It is tempting to jump into this trade and ride further up. But do your due diligence and be careful. All these funds are trading lower in after hours. I guess the market players are buying what Bernanke is telling them about the economy and that the FED will keep rates lower. When the reality hits them players these short funds will again soar.