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Tuesday, April 24, 2012

Pressure Cooker

 We have seen how the simple 50dma has been resistance, and now the exponential average, which had been support, may now be becoming resistance. We are in the process of establishing a short term down trend line which the market is testing, and so far has been thrown back. 1358 looks to be the now established support level, 1392 the breakout point, and until one is broken, we really don;t know what is going to happen next.

Crude oil continues to hold up pretty well, actually rising slightly in the last 5 days. This usually has pretty well established pivot points at roughly even intervals, and right now it is 100 and 110, with 105 in the middle. It has spent nearly a month in the lower half of that range, and we may get another test of 100 before this starts moving up again, but I think the eventuality is that is will go up.

Gold has been quite a bit waeker, but is showing some signs that it might be bottoming.  One problem is an inability to get above the 50dema, which is descending; another problem is lack of support at the 200dema. However, MACD is improving, as is RSI, so this may be ready, finally, to start building the right side of a base.

The yield on the ten year Treasury continues a rather unbelievable drop, which barely shows signs of slowing down. If this is any indication, we may be in for a pretty severe correction.

The U.S. Dollar index was down marginally today (this chart has not updated yet), and really hasn;t been going anywhere. The market is no linger tracking the dollar (or the Euro, for that matter) tick for tick as it did from 2009-2011, but if this starts a major move in one direction or the other, the market will start paying attention. The Fed is out of just about everything but hot air in their attempts to move this, but there are plenty of disasters waiting to happen that will move this up.

Today was a decent day for the market, but a terrible day for the growth stock world. Earnings will be coming out in droves (AAPL tonight, for instance),. so conditions can change on a dime.

I will have the new highs update shortly.

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