Apr. 12th
Stocks:
Well we got a tag of most major psychological resistance levels today. I think it’s safe to say that most everyone is looking for a pullback here. So I kind of doubt we will power through these levels on the first try. Of course it remains to be seen whether this will initiate the beginning of the correction into the daily cycle low. Amazingly option traders were still piling into calls today at a rate of 2.5 to 1, so nothing has changed in that department. There’s still way too much bullish sentiment. We also got another large negative money flow today on the SPYDER’s. Well until the 5:00 data came out anyway. By that time -227 million turned into -46 million, so I’m not sure what to make of that. Breadth: I mentioned last week that these small moves often proceed a big move in the market. This late in the rally I doubt it’s going to be up. Retail: Retail has been leading this rally, to the amazement of just about everyone, myself included. Today we may have seen an exhaustion move on 2.5 times normal volume. Dollar: The dollar should get interesting at this level. If it is in a cyclical bull, and it appears it is now that the 50 day moving average has crossed above the 200 and the 200 has turned up, then the critical 80 support level should hold. This also corresponds to the 200 week moving average that the dollar just recently recovered after several weeks of struggling with that level. We keep hearing stories that Greece will be rescued. And every time one comes out the Euro strengthens and the dollar weakens. However it’s now time for more than words. Someone has to actually write a check. A check that everyone knows will get vaporized the second it lands in the Greek financial system. Germany has elections in May and I would say Greece is a hot potato to the German political machine. If that check gets written before the elections I would be amazed. I think we will just continue to hear promises but nothing will happen until another term is safely locked away. Gold: So far my plan to induce a correction appears to be working…at least in the miners J Oil: Oil still diverging in the bull flag and still due for a cycle low anytime now. If this breaks down hard out of the bull flag and drops back below $83 I would take that as a sign the correction has begun. Now we will just have to wait and see if tomorrow brings another swing high and another attempt to put in the top of this daily cycle. Short term indicators are still overbought. Gary
