3/2 Morningline

Blue chip stocks (SPY) gapped up 0.4% this morning and then sat at the new level trading very narrowly, within a couple of cents of the opening.

Long-term Treasury bonds (TLT) gapped down 0.5%, and sat trading in an equally narrow range.

Media narratives credited Greece for the gaps, as Greece has been credited so many times before during the last few weeks, for up markets, down markets, sideways markets, earthquakes, eclipses and dyspepsia.

The euro barely moved against the dollar, trading within yesterday's range. If Greek debt were the cause of all, wouldn't the euro be moving wildly in response to the crisis? Just asking. The SPY move gave the chart a decisive high high, the third since the low of Feb. 5. The price is moving toward the 78.6% Fibonacci retracement of the decline from Jan. 14 to Feb. 5. If it in fact it is a retracement rather than a push to a new higher high above the Jan. 14 level. So, interpretations: If SPY moves above $115.14 without falling below $104.58, then it is continuing the uptrend that began in March 2009. If SPY reverses while below $115.14 and falls below $104.58, then a new downtrend began in January. If it pierces neither level and instead meanders between the extremes, then there's no identifiable trend. For the trader, that means an tendency toward whipsaws and loss. The Parabolic Stop and Reverse (psar) and Person's Proprietary Signal continue to flash bull on SPY, as does the Moving Average Convergence-Divergence (macd).

A look at the computer-based algorithmic trading systems used by the big players to profit from the slightest, most rapid moves in share prices. "The days of turtle trading are over," says author Irene Aldridge.

The Money Flow Index (mfi) is close to overbought territory, and the Stochastic (sto) shows overbought.

Let's run the numbers, at about 10:15 a.m. Eastern:

Indicators:

• Blue chip stocks etf (SPY) is trading at $112.23, entered macd bull mode at close on Feb. 15 (at $109.74)
• Fear index or volatility (VIX) 19.23, bear (bullish for stocks), Feb. 12 (22.73)
• Treasury long bonds (TLT) $90.98, bull, Feb. 25 ($91.18)
• Corporate junk bonds (JNK) $38.52, bull, Feb. 18 ($38.40) 
• Emerging markets (EEM) $39.93, bull, Feb. 16 ($39.43)
• Gold (GLD) $110.18, bull, Feb. 12 ($107.04)
• Oil (USO) $38.71, bull, Feb. 10, ($36.51)

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3518, bull, Feb. 19 ($1.3611)
• Yen per dollar (USD/JPY) ¥89.10, bear, Feb. 25 (90.14)

Stock option holdings, March expiry:

• AKS, iron condor (p19/-p20/-c25/c26), $22.53, bull, Feb. 12 ($21.68) This turkey has been giving a series of ghost bull signals on the macd, which later disappear.
• CAL, covered call (-c19), $20.66, bull, Feb. 16 ($21.24)
• CSCO, iron condor (p22/-p23/-c25/c26), $24.64, bull, Feb. 8 ($23.50)
• GCI, covered call (-c15), $16.00, bull, Feb. 18 ($15.27) 
• WFC, iron condor (p26/-p27/-c29/c30), $27.97, bull, Feb. 22 ($28.01)

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