Stock indexes end little changed for day, Commodities higher

spy0404.pngStock indexes closed about where they opened today after a disappointing employment report. The bulls can argue that the market could have reacted to the negative news sharply on the downside, and the fact that the indexes were able to at least rally for part of the session and close without a big loss was somewhat of a victory. Bears can argue that there has been little progress after the big up day on Tuesday. You can see on the chart where I put the cyan ellipse that there are three upthrust that failed to attract buying, and each time the market closed at about the same location. Momentum is also getting a bit overbought on the very short term, and a slight divergence is setting in. There is also some major chart resistance at the pivots where I drew the yellow line. The market could easily pull back a bit to gather some strength before attacking that yellow line. It does look like the market wants to work higher, but maybe a little stumble first. It’s just a guess. It could overcome resistance without pulling back, but it would be nice to see momentum pull back first. You can see how the daily bars are wide ranging with many changes of direction from day to day, which makes it a flip of the coin to say what might happen a day or two out. But I’ll repeat that usually this choppy activity is more characteristic of markets trying to come off of bottoms. Not always, but usually. Tops are most often more complacent and with less chop.
profile0404.pngI once again show the profile bell curves. The forth day back is just part of the trend day session on Tuesday. I cut off the bottom as the chart would have been too long. The three upthrusts I referred to on the candle chart above is shown on this chart as the price activity above the blue horizontal line. Often these upthrusts, when they occur at the end of a market move, will have a row of single prints to show a selling extreme. The fact that these profiles formed with a lot of volume means that the upthrusts are not the termination of the move. The lack of pushing value higher (the purple vertical lines) would indicate that the market has been fairly balanced between buyers and sellers. Buyers have come in at the lows and sellers have come in at the highs, and there has been much rotation back and forth. The market will come out of balance, and the odds look like the resolution should be to the upside, but a test back down first would not be a surprise and would not invalidate upside case, unless of course the lower test fails and selling is triggered. It is always best to be prepared for both scenarios, as anything can happen. I know it sound like saying the market can go up or it can go down, but that actually is the case. All one can do is weigh the evidence and see which way the odds tilt. Nothing is 100%. Although I’m sure the dollar bears and commodity bulls believe that bet is 100%. (For those unfamiliar with the profile there is a link to the CBOT on my resource tab where you can download an excellent pdf manual, as well as view some video seminars. It is the third link down.)
baltic0404.pngThe chart to the left is the Baltic Dry Index. I haven’t posted this for some time now as there hasn’t been much to say. There was a huge drop just when all the bulls said the uptrend had a long way to go, and since the drop there has been about a 50% correction back up, and now it is going mostly sideways, perhaps with a slightly down tilt. With copper and oil prices bumping along the highs, and the US Dollar still close to all time lows, it is surprising that this index hasn’t advanced further. Perhaps the implication is that there is going to be more of a global slowdown than just a slowdown in the US. If so then there should be a shift to lowering interest rates globally, and with the US rates getting close to zero, the end of the dollar decline should be near. I sound like a broken record on the dollar, but it can’t go down forever. (can it…..?) The masses are short the dollar and believe it is a one way street to zero, and the masses are always proven wrong …… eventually.