Commodities fall again on strong dollar, Stock indexes rally

The dollar continued its advance today, and as expected many commodity markets fell. There seems to be a general unwinding of the commodity trade and with momentum chasers switching back to tech names. Today the stock indexes started the session about where they left off yesterday after the failed rally. My concern with the rally failure, failure to clear some prior pivot, low volume, and momentum rolling over, was that the indexes would test back down into the area of the uptrending moving averages. That test back down doesn’t seem to be in the cards at this point unless new negative information comes into the market. It is a difficult trade to try to capture a retracement against the trending moving averages. I try to only go in the direction of those blue moving average lines unless there is a very clear divergence pattern. The Nasdaq/QQQ chart didn’t look as negative as the S&P/SPY chart. Today the Nasdaq started to rally early in the session as the S&P struggled, only retracing a part of the bar from Wednesday, as the Nasdaq was heading into new recent high territory. Later in the session the S&P joined the party and both indexes closed strong, turning momentum back up in the direction of the trend. There doesn’t seem to be any significant points of resistance in the Nasdaq for about 20 points, but there is one previous support level August and one from late November on the S&P that we are close to that could cause some pause. I’ll post chart on my update this weekend. If there is no surprise in the report on Friday there probably more to come on the upside. But like I’ve said many times, if the uptrend is to continue volume should be coming into the market. So far there isn’t much enthusiasm. The trend is like a slow creep up, although there are some large range bars on unimpressive volume.

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