Rumor Fatigue

 For another rumor filled day, it was a pretty weak follow on move for the market today (Russia is now rumored to join China in bailing out the euro-zone) and judging by which sectors were leading, I am guessing it was mostly short covering. One thing that strikes me here (and keeps me on the bearish side): despit two relatively decent up days, MACD histogram is still dropping. It is going to need at least a good up day tomorrow to reverse that, and that might not be very likely. We have a bunch of resistance to get through here, the first big resistance coming near 1204, but that descending 20dema could also put up some. In fact, all the exponential averages are now dropping. 

 Crude oil is again hitting resistance (here on USO at 35), but this is building up some upward momentum and has a pretty solid short term up trend line, so we could see a breakout here in the next few days. I am still amazed that oil has held up as well as it has in the last month or so, but if the market starts tanking again, so will this. 

 Gold, on the other hand, is not going to tank unless Martian spaceships loaded with it land on the White House lawn. It is still in the same trading range it has been in for a little over a month, and gold consolidations are usually measured in months rather than weeks, so it may be quite a while before we see another breakout.

 

 Last week the yield on the 10 year was at the unfathomably low level of 19. It went even lower than that, but bounced back up to where it was. We do have a reversal in MACD histogram, so this could be the beginning of a move back above 20.

Last week the dollar index had made a big move up, and this week it made another one. It is now above the 200dema for the first time in ages, and that could be support. So far, the market has not responded, but i expect it will.

I did not see anything today to change my basically bearish stance. The weakest sectors lead today, telling me that this rally is mostly rumor driven short covering,a nd unless that changes, it will not last long.

I will have the new high update shortly.