Another trending day at the market!

After being higher overnight, the market opened slightly higher, and at this time the DOW is trading at 12813, up 50, while the SPX is up 0.96.  The COMP and the NDX and XLF are lower, while the RUT and DJT are higher.  As should be clear by now, the financials are the big laggards and the Transports are the big gainers.  After setting new recovery highers again yesterday, the market internals continue to offer warnings to be careful.  The volume, the RSI and MACD and new highs vs new lows and Up volume vs down volume continue to show negative divergences, and I think are suggesting caution.

After a week of good earning, and some disappointments, the market seems determined to  trade higher.  For all of you out there who consider themselves well informed financially, I want to remind you that the markets aften trade completely independent of fundamental conditions.  As someone somewhere said...."the market can remain irrational longer that you can remain solvent." 

I did not trade on my own Buy signal as I was looking over my shoulder at some troubling indicators and was of course focused on what I thought I new fundamentally.... that the market was way overbought.  But once again, I was shown that success in trading is to follow your indicators, and when a position, to carefully protect that position with stop loss orders.  I am reminded again that the thing most difficult to manage is greed and fear.

The break out above the neck line of the inverse head and shoulders is a very powerful signal the market is headed higher, at least for the short term.  I have been looking for a pull back to offer an opportunity to get long, but Mr Market has not been very obliging.

The big news continues to be new highs in the Precious Metals, while Copper, the darling of the equity traders, continues to stall and has not been leading as it did all of last year.  The driving force of all the asset class trades is of course the Dollar, which made a new 3 year low, and is now only 2 cents away for a new all time low.  Until the dollar can catch a bid, I don't think the market will demonstrate much weakness.  One asset class that is showing there may be some change in the wind is the bond market, which has been unexpectedly trading higher, in the face of all the inflation fears reflected in the PM's and the market.

As my old friend and manager Captain Gatorbait used to say.. ."Bill, the trend is your friend" ......pause..... "until it isn't".

Best To Your Trading!

Bill