Friday, January 13, 2012

Morning Market

Remember that I'm looking for the following events to "like" the market rally: an increase in copper, better intra-day stats in the equity markets, a continued rally in the dollar and a sell-off in the treasury market.

Yesterday, copper popped higher on very high volume.  While it printed a small bar, which I really don't like, the upward gap is impressive.  Plus, the gap has come at a technically important time.

The dollar is right at important technical levels -- highs from early October.  The EMAs are still strong, but the A/D and CMF are weakening, which is concerning.

The dollar has been moving sideways for the last six days, using the late and mid-December high points as technical support.  We need to see the dollar move through the 23 price level.

The treasury market is consolidating and not selling off -- at least not yet.

The above two  charts of the IWMs and SPYs illustrate my continued concerns with the equity markets.  The IWMs stayed in a tight range for about a week and a half before drifting higher over the last three sessions.  The SPYs have traded in two tight ranges for the last week and a half, but there hasn't been a lot of strong intra-day action. 

The QQQs are the best looking average, with a clear uptrend, but also have the same issue -- trading in ranges, popping a bit, and then trading sideways.  The fact that only one average has a good chart is also concerning.