Friday, October 28, 2011

Morning Market

Over the last few weeks, I've been hesitant about the risk on trade.  No more.  Yesterday we say a strong break-out in equities in conjunction with a sell-off in the Treasury markets -- where we finally saw some volume increases on the sell-off.  The reasons for this rally were: the EU coming to some type of agreement and the US printing a decent GDP number.


The DIAs -- which are already above the 200 day EMA, gapped higher.  The 10 day EMA has crossed the 200 day EMA and the 20 is about to follow suit.

The SPYs also gapped higher yesterday.  The shorter EMAs are bullishly aligned and we had a bump up in volume as well.

The IWMs have more of a ways to go.  While prices are now over the 200 day EMA, the shorter EMAs have yet to cross.  Given recent price action, they probably will in the near future, but we're not there yet.  However, note the nice volume bump yesterday.

Notice we have three averages bullishly aligned.  In addition,

both the 7-10 year and 20 year plus treasury market finally moved lower on a nice volume bump.

Short version: equities are rising and the sell-off in the  Treasury market is gaining steam.