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Tuesday, March 27, 2012

HFT Fun

Things are simplifying here, as the current pivots are settling into nice comfortable numbers: 1340, 1380, and 1420. The R2 pivot at 1417 is also still intact, and actaully has a [retty good chance of holding until the end of the month. I hope you had fun on that last hour HFT induced drop.

Crude oil is still range bound, having barely moved in the last 5 days. It does, however, appear to be building up some steam for a move up, but that may not come for a while. This is still a bullish chart, even though it was just as bullish last week.

When gold makes a bigger move than the market, you can take a wild guess that Bernanke was behind it. This slammed into the 50dema, where is has found some resistance. I don't expect it to last long: it will probably fall the next time Bernanke opens his mouth. 

After a on week respite, the yield on the 10 year treasury has resumed it's 5 days up, 5 days down pattern. That means the next 5 days should be up. 

Well, talking about range bound: the dollar index has established a new range and is bouncing around in it. The dollar up, market down correlation is strengthening just a bit, but not enough to satisfy the algo traders. The problem here is that when this goes up, it could mean the dollar is strengthening, but it could also mean it is weakening less than the currencies it is measured against. If you nwant to know what the dollar is really doing, a quick trip to the grocery store will clue you in.

I hate to say it, but I still believe we are in for a correction. While the damage was very light today, resistance keeps popping up. Bernanke can't keep the markets levitated forever, at some point there will have to be real earnings propping these things up. We have a couple of weeks before the next round of earnings start, and we might start seeing some unpleasant surprises.

I will have the new highs update shortly.

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