Stock higher

spy0225.pngStock indexes were higher for most of the session, but got a good boost late in the session, once again, when news crosses the wires regarding credit ratings for MBIA and Ambac, apparently stalling downgrades for now. That news was enough to push the S&P index above a downtrend line (yellow line on chart). The trend indicator lines (cyan and blue lines) have been going sideways and and squeezing together, with price able to clear both lines to the upside for the first time this year, with the exception of one brief moment on Feb 1st. Momentum is higher. It looks like a test of the pivot where the red horizontal line is drawn is a logical target and area to test. As soon as trend indicator turns positive it looks like dips could be bought. The bear will stay in the box until longer term trend indicators turn around. This still looks like a rally within the context of a longer term bear.
Gold came off a bit today. There was some momentum divergences, but the trend is still to the upside, so these divergences usually fail until the trend stops accelerating. However, prices are under the Jan 30th pivot, which is a warning sign for the bullish case. I still would prefer to wait for the trend to be confirmed to the downside before shorting. There should be plenty of rallies to short against a downtrend (if one ever develops). For now I’m on sidelines. The correct trade is still probably to buy pullbacks, but I can’t be comfortable being in such a crowded and one-sided trade, as I’ve pointed out many times here. The grains are in parabolic rally mode once again, with wheat clearing the old high in the July contract, and a big gap up in the night session as I write this.

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