The "Risk Off" trade in commodities may be reviving but it does not appear the investor class is ready to abandon the safe havens of the U.S. Treasury market.
Chris Kimble at Kimble Charting has been pointing to the long term SPX chart, noting the significant long term trend support line. Here is the chart, starting 1985
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Here is the 5 year chart, again showing the important trend support and resistance lines.
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It is clear that Mr Market has painted himself into a corner.. and until a Breakout or a Breakdown can be described, I believe trading here is merely gambling.
I found this report on the web this morning, offered by Bloomberg BusinessWeek, addressing the lack of accurate financial information and unreported market exposure as a primary cause of the financial crisis. The report can be found here. Thanks and a tip of the hat to Danielle Park at JugglingDynamite.com. It is a little long, but is worth the read.
The Proprietary Momentum Changes Indicators are still on the Buy signal first generated on 4/20, although I do not feel this is the time to chase the market. It has always been my experience that the best gains are established when action is taken when a signal is first generated. I have been staring at charts now since last week, trying to make sense of what is going on in the markets, and the only clear trend that I see is in the debt markets, and especially U.S. Treasuries. I especially like the TLT, which has broken out of the IHS and looks like it wants to go higher. However, it likely that it could retreat back to the neck line at around 93.5.
Still sitting on the sidelines.. Best To Your Trading!
Bill
