There is not much news this morning that is not already on every cable news station... crises in Japan is looking to stabilize, Libya is feeling the impact of the No-Fly zone imposed by the NATO nations and with the consent of the Arab League. I looks like the "Risk Trade" is back on.
This morning, the Proprietary Momentum Changes indicators for the SPY and the Russell 2000 have flipped to BUY, while the NDX and the COMP and the Transports are still Sell, but are in the neutral zone. The SPY is having trouble breaking resistance at 130.00 and has now back away 3 times on the 5 minute. I will have some new recommendations this afternoon after we see the market this afternoon, going into the last 1/2 hour. In addition to the Momentum Change Buy signal, the VIX generated a new Buy signal on the close Friday, but nearly every Technician has already seen that.
The Oil market is higher at102.18, Gold is higher at 1429.9 and Silver is higher at 35.94 while the rest of the commodity complex is mixed. However, Copper is off again this morning and is not yet confirming the strong equities and PM markets. The Euro is higher, trading 1.419 while the Dollar continues lower, trading 75.54 and convincingly below support at 77 and only 150 basis points higher than next support around 74. The Bond market is soft, consistent with the "Risk Off" trade, with the 10 year trading lower at 3.342% and the long BOnd is lower, trading 4.459%.
Although currently with intra-day trading generating new Buy signals in the RUT and the SPY, I have seen previous new signals generated intra day deteriorate and disappear by days end. So I will wait until I see how the close is shaping up. In fact, my inclination is to short this rally around this level, and I was looking earlier at short opportunities at the 129 level. So lets wait and let the market show us what it wants to do.....that is the whole purpose of the Momentum Change indicators.
Best To Your Trading!
Bill
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