Monday Afternoon

Lots of buying in the first hour, takkng the Dow up 80 points, or 60%.  All of the indexes were higher this morning, but enthusiasm has faded for some sectors.  at 3:15pm, the Dow is up 72 points, or 68%. The SPX is up 4 points, or 0.30%.  The Transports are up 22, or 0.44%, while the RUT is down 3.65 or 0.44%, the NDFX is off 1.68 or 0.07% and the COMP us iff 8, or 0.29The XLF is up 0.06 or 0.35%, and the BKX is off .24 or 0.43%.

Momentum has not improved much for the Bull, even after a substantial rally Thursday afternoon, Friday and now Monday.  I would guess that we could see another day or two before this rally rolls over into another decline.  I am looking for a decline on the next pull back into the 55 ema at 2860 in the SPY.

I have seen several comments in the past several days that refer to a study, going back to 1929, the 80% plus of all the gains in the market can be accounted for by moves that develop in the last trading days of the month, and continue into the first few trading of the following month.  Seems hard to believe, and I often seem to forget this little nugget myself, /but  it seems to be playing out again this month..  Some cycle works points to trading top this week, and the Momentum Change indicators continue to look for a pull back.  It will be important to watch the action the next two days as it  tests the LOD and HOD of the previous day.

I read a very interesting report this morning from David Rosenberg of Gluskin Sheff.  The entire Breakfast with David is behind a a subscription wall, but you can register for free and receive the daily report around 10:30am in your inbox. 

At 77.5 in February, the consumer sentiment index is at its highest level since
January 2008, up from 74.2 last month and above consensus views. But a more
complete picture would include this ― 77.5 is the very weakest this index has
ever been 20 months into a post-recession recovery, and even in the jobless
recovery in 2002, it stood at 90.9 at this juncture and in the jobless recovery in
1992, it stood at 85.3. So sorry, 77.5 still does not do much for us.
Keep in mind that half the responses were taken by February 9th and that the
survey ended February 23rd, so the vast majority of the survey captured the
period to February 18th when the S&P 500 spiked to a high of 1,343.

Best To Your Trading!

Bill

Monday Morning

Europe and Asia equity markets were up overnight, and the U.S., after trading lower most of the weekend, rolled over and opened with a .50 cent gap in the SPY.  at 10:30am, the Dow is up 73, the SPX is up 6.65.  Al the other major indexes are also up.  The violence in Libya continues escalate, with some observers thinking that the country could sink into civil war.  Of course, that would mean a lengthy interruption of the 1.5 MBPD delivery of that prized Sweet crude.  The Sauds claim they are replacing that production with an increase in their own production, however, it appears the replacement is a lower value Sour crude.

Oil traded over $100 this weekend, but sold off over night and is trading down slightly at 97.44.  Gold is higher at 1410.4 and Silver is also higher at 33.57.  The Euro is higher, trading at 1.3833 in spite of weakness in the debts markets for Spanish and Portuguese paper.  The elections in Ireland went as expected with the long time ruling party being replaced with a new crowd.  The reports are that this new crowd is very unhappy with the Bailout imposed on the previous government by the ECB and they will be negotiating a new settlement that would not place the Irish tax payers on the hook for the bad loans made by other EU banks.


The Dollar is weak again this morning, and is trading right at support according to my charts.  Mr Greenback needs to get going, or the going is going to get much harder.  (Like that?)  The U.S. bond market continues to respond positively  current events, with the 10 year Note up slightly, trading at 3.412% and the long Bond is flat at 4.503%

The Proprietary Momentum Change Indicators generated a Sell confirmation on 2/22 and it is still in effect.  The recommend trades have all been stopped out with small profits, and it is not what was expected.  However, they is another opportunity coming up shortly to re-enter the market, and that opportunity could come as early as Tuesday or Wednesday.

I will have some comments this afternoon on the best print for the Chicago PMI, since 1988, and the Personal Income and Saving print.

Best To Your Trading!

Bill

TGIF 3:45pm

Sorry.. I don't see a trade I like at this point... I guess we go into the week end flat.

we are now stopped out of all the trades from 4 days ago....

I am happy there are no "I hope it goes back up" positions.".

Best to Your Trading!

Bill