3/1 Morningline

Blue-chip stocks (SPY) gapped upward this morning, opening 0.4% above Friday's close, and then bumping up a similar percentage, low to high.

The movement put SPY at the very near term high set Feb. 22. A break out above $111.58 would negate the apparent downtrend pattern set with the Feb. 23 decline. "Apparent downtrend pattern" is a technical term among traders that means, "Gee, it looked like a downtrend at the time. I wonder what went wrong?"

It is important for a trader to always get the terminology right.

Long-term Treasury bonds (TLT) opened below Friday's low and has 0.8% to fall before encountering support. Both SPY and TLT are showing bull signals on the macd. The SPY money-flow index is bouncing sideways just below the overbought line, while TLT's mfi is meandering in the middle of the neutral zone. Additionally, SPY this morning is showing a new bull signal on Person's Proprietary Signal (pps). Four trading days earlier the etf showed a pps bear signal. I think the best read of SPY and TLT is that both are stuck in whipsaw country, when signals can lure the unwary into unprofitable directional trades (as opposed to structures like the iron condor, which prospers in sideways trends). The dollar rose against the yen, marking the end for now of a decline that carried the U.S. currency down 3.7% in six trading days. In my holdings, XHB has moved above the stop/loss on my bear position. I'll close and take the loss.

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Let's run the numbers, at about 10:05 a.m. Eastern:

Indicators:

• Blue chip stocks etf (SPY) is trading at $111.56, entered macd bull mode at close on Feb. 15 (at $109.74)
• Fear index or volatility (VIX) 19.67, bear (bullish for stocks), Feb. 12 (22.73)
• Treasury long bonds (TLT) $91.09, bull, Feb. 25 ($91.18)
• Corporate junk bonds (JNK) $38.52, bull, Feb. 18 ($38.40) 
• Emerging markets (EEM) $38.62, bull, Feb. 16 ($39.43)
• Gold (GLD) $109.36, bull, Feb. 12 ($107.04)
• Oil (USO) $38.96, bull, Feb. 10, ($36.51)

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3529, bull, Feb. 19 ($1.3611)
• Yen per dollar (USD/JPY) ¥88.17, bear, Feb. 25 (90.14)

Stock option holdings, March expiry:

• AKS, iron condor (p19/-p20/-c25/c26), $21.81, bear, March 1 ($tbd)
• CAL, covered call (-c19), $20.05, bull, Feb. 16 ($21.24)
• CSCO, iron condor (p22/-p23/-c25/c26), $24.49, bull, Feb. 8 ($23.50)
• GCI, covered call (-c15), $15.73, bull, Feb. 18 ($15.27) 
• WFC, iron condor (p26/-p27/-c29/c30), $27.46, bull, Feb. 22 ($28.01)
• XHB, bear call spread (-c15/c16), $16.05, bull, Feb. 11 ($15.76) 

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Topics: S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, emerging markets, gold, precious metals, oil, petroleum, AK Steel Holding, Alpine Total Dynamic Dividend fund, Continental Airlines aviation, Cisco Systems networking, CVS, pharmacies, drugs, Gannett newspapers media , Moodys bond rating, Annaly Capital Management real estate REIT mortgage-backed securities, Palm smartphone Pixi Pri, Potash Corp. Saskatchewan, Wells Fargo banking financial, homebuilders.