2/3 Morningline

Blue chip stocks (SPY) opened at the top end of yesterday's trading range, and the price stands near the 38.2 percent Fibonacci retracement level. The key thing to note is that the macd is consistently and rapidly moving up toward the zero-line. This is a bullish indicator.

Treasury long bond prices (TLT) gapped down  by nearly half a percent, and the macd gave a potential bear signal. Oil (USO) is trading higher at the top end of yesterday's range and the macd is showing a potential bull signal.

The U.S. dollar is showing a 1 percent decline against the Japanese yen (USD/JPY) on the day after the macd gave a bull signal. The trading range is about there things have stood for four days. High-yield corporate debt (JNK), which is moved most by expected default rates, is trading narrowly within yesterday's range, as is gold (GLD) and emerging markets (EEM). Among my holdings, ERTS shows a potential bull signal on the macd.

Interpreting the SPY price action runs into some ambiguities. The decline from Jan. 20 to Jan. 29 can be seen as a correction from a higher high to a higher low, a bull move, if you consider the movement before that to have ended on Nov. 2.

However, if you look more closely, and count a higher high on Nov. 16, followed by a higher low on Nov. 30, then last month's low was indeed a lower low and we're in bear territory unless a higher high is made.

Date	Type	Price
Nov. 3	low	103.08
Nov. 16	higher high	111.69
Nov. 30	higher low	108.12
Jan. 20	high high	115.13
Jan. 29	lower? low	107.22

Let's run the numbers.

Indicators, at about 10:15 a.m. Eastern:

• Blue chip stocks (SPY) is trading at $110.09, entered macd bear mode at close on Jan. 20 (at $113.89)
• Fear index or volatility (VIX) 21.45, bull (bearish for stocks), Jan.20 (18.68)
• Treasury long bonds (TLT) $90.74, bull, Jan. 12 ($90.32)
• Corporate junk bonds (JNK) $38.63, bear, Jan. 19 ($39.87) 
• Emerging markets (EEM) $39.65, bear, Jan. 15 ($41.95)
• Gold (GLD) $109.10, bear, Jan. 12 ($107.37)
• Oil (USO) $37.84, bear, Jan. 15, ($38.40)

 Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3935, bear, Jan. 20 ($1.4106)
• Yen per dollar (USD/JPY) ¥91.00, bull, Feb. 2 (90.37)

Stock options holdings, February expiry:

• CVS, iron condor (p29/-p31/-c34/c36) $33.00, bear, Jan. 21 ($33.24) (Earnings is Feb. 8. Should I hold and risk a surprise?)
  
• ERTS, iron condor (p15/-p16/-c18/c19)  $17.08, bear, Jan. 12 ($16.85) (Earnings also Feb. 8.)
• MCO, covered call (-c30) $28.39, bull, Jan. 28 (28.32) (Earnings Feb. 4)
• PALM, covered call (s/-c13)  $1.19, bear, Jan. 26 ($11.17)

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Topics:
S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, emerging markets, gold, precious metals, oil, petroleum, CVS, pharmacies, drugs, Electronic Arts games, Moodys bond rating, Palm smartphone Pixi Pri.