4/15 Morningline: Indicators

Blue-chip stocks (SPY) are trading a the upper end of yesterday's range, remaining pennies below the higher high set in the prior day's trading.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SPY $121.08
TLT $88.81

At 9:55 a.m. Eastern

Treasury long-term bonds (TLT) gapped down, opening 0.3% below yesterday's close.

SPY has gained 1.8% since the last lower low was record on April 13 and 15.9% since the three-month-chart low set on Feb. 5.

The next highest major reversal point is around $128, nearly 6% away to the upside.

TLT is experiencing its third straight day of decline, a period that has seen the price fall by 3.6%. Today's low so far stands 4% below the three-month-chart high set on Feb. 5.

Overall TLT has been tracing a sideways squiggle since March 24. Today's decline moved Person's Proprietary Signal into bear mode after four days in bu ll mode. TLT has been prone to whipsaws for the last three months and more.

---

Buy--DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk

Financial consultant Leslie Masonson describes a strategy for actively trading exchange-traded funds.

---

A decline in TLT means traders expect higher interest rates ahead. Any number of causes are possible, but the most straightforward explanation is that the market is pricing in the probabilities of the Federal Open Market Committee raising interest rates sooner rather than later.

If the FOMC raises rates, that means that business activity has picked up to the point where inflation is a danger. What's bearish for bonds is bullish for stocks, except that higher interest rates on bonds make stocks less attractive, so what's bearish for bonds is also bearish for stocks.

The markets are one big logical contradiction -- yesterday, today and tomorrow.

Other indicators are trading within their recent ranges, with oil (USO) showing a bias to the upside and the euro-dollar forex pair (EUR/USD), to the downside.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
VIX 16.15
JNK $39.90
GLD $113.19
USO $41.87
EEM $43.77
EUR/USD $1.3556
USD/JPY ¥93.43

At 9:57 a.m. Eastern
Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

Exchange-Traded Fund Symbols:
EEM - emerging markets
EUR/USD - euro/dollar currency pair
GLD - gold
JNK - high-yield corporate bonds
SPY - blue-chip stocks
TLT - Treasury long-term bonds
USD/JPY - dollar/yen currency pair
USO - crude oil
VIX - fear index

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

New to Private Trader? Check out the Reader's Guide.

New to private trading? Here's a look at How to Become a Private Trader.