3/8 Morningline

Stocks opened barely changed at the top of Friday's trading range, a day that showed a strong upward push in the blue chips.

SPY, the exchange-traded fund that tracks the S&P 500 index, has regraced most of the decline that, beginning Jan. 19, brought pricde down from $115.14 to $104.58 on Feb. 5.

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Abbreviations: pps - Person's Proprietary Signal, ma20 - 20-day moving average, macd - Moving Average Convergence-Divergence, mfi - Money Flow Index, sto - Fast Stochastic

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The subsequent rise has brought the price to within less than a $1 of the January peak. If the price pushes past $115.14, then SPY will record and higher high and remain in an uptrend -- of sorts -- in the rise that began at $67.10 in March 2009.

The "of sorts" caveat comes from the Feb. 5 price, which can be interpreted as a lower low, or by ignoring some intervening lows, as a higher low. So, it's ambiguous, and probably irrelevant if the etf makes a decisive push above the $115.14 level.

Both the mfi and the sto are in overbought territory. The psar, macd and pps remain in bull mode, where they have been since mid-February. Long-term bonds issued by the U.S. Treasury (TLT) have gapped down, opening 0.4% below Friday's close in an area of congestion set in mid-February and around the end of 2009 and the start of the new year. The psar and macd remain in bull mode, although the macd is within less than 0.01% of the zero line. The pps showed a bear signal on Friday. The sto has moved to the oversold line, and the mfi meanders in the neutral zone. Gold (GLD) is showing a pps bear signal on a decline that has traversed 1.2% high to low so far today. The psar and macd remain in bull territory, although the macd is declining. The sto has crossed down through the overbought line, a bear signal, and the mfi is neutral.

Jeff Augen, one of the finest thinkers about options, lays out strategies and models for winning the end game as expiration approaches.

The dollar is showing a macd bull signal against the yen (USD/JPY), one trading day after the pps issued a bull signal. The psar remains in bear mode.

To the numbers, at about 10:30 a.m. Eastern . . .

Indicators:

• Blue chip stocks etf (SPY) is trading at $114.34, entered psar bull mode at close on Feb. 11 (at $108.13)
• Fear index or volatility (VIX) 17.76, bear (bullish for stocks), Feb. 17 (21.72)
• Treasury long bonds (TLT) $89.93, bull, Feb. 25 ($91.20)
• Corporate junk bonds (JNK) $39.20, bull, Feb. 22 ($38.91) 
• Emerging markets (EEM) $41.03, bull, Feb. 11 ($39.93)
• Gold (GLD) $110.05, bull, Feb. 11 ($107.13)
• Oil (USO) $39.86, bull, Feb. 16, ($37.20)

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3647, bull, March 3 ($1.3696)
• Yen per dollar (USD/JPY) ¥90.04, bear, Feb. 25 (¥89.07)

Stock option holdings, March expiry:

• AKS, iron condor (p19/-p20/-c25/c26), $23.78, bull, March 3 ($22.81)
• CAL, covered call (-c19), $20.47, bull, Feb. 9 ($19.16)
• CSCO, iron condor (p22/-p23/-c25/c26), $25.67, bull, Feb. 4 ($23.16) Moved above the max profit range, so must consider closing for a loss.
• GCI, covered call (-c15), $16.19, bull, Feb. 16 ($14.80) 
• WFC, iron condor (p26/-p27/-c29/c30), $29.05, bull, Feb. 22 ($28.01)

Zombies:

• MCO, long shares, $28.25, bear, Feb 4 ($26.39)
• PALM, long shares, $5.48, bear, Feb. 18 ($9.62)
  

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