| trend | adx | psar | pps | macd | macd trend | sto | sto trend | |
|---|---|---|---|---|---|---|---|---|
| SPY $121.15 | ||||||||
| VIX 15.59 | ||||||||
| TLT $89.82 |
The resistance level at $89.99 was tested four times in five days before today's breakout.
Blue chip stocks (SPY) are trading narrowly near yesterday's close and within the range of the last six trading days. The $121 to $121.19 level has been tested five times in those six days, without a breakout.
Rising bond prices means there's an expectation of falling interest rates, or at least stable rates. The falling yields constitute a paradox in the broad world of the markets.
Stocks have been on the rise since early February, suggesting strong expectations of an economic recovery, and that optimism has been buttressed of late by the economic statistics.
A rising economy, if past is indeed prologue, hastens the day when the Federal Open Market Committee will raise short-term rates to avoid inflation. And indeed futures on shorter-term government debt, such as the five-year notes, are trading down today, in anticipation of higher yields.
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So what the markets are saying is higher yields in the near term, lower yields in the longer term. To me it suggests the markets are pricing in a weak recovery, one in which the Fed may raise rates, but then will need to backpedal and lower them again.
The signalers I follow remain bullish on TLT.
For stocks, the signals on SPY are mixed: The parabolic sar is in bear phase, but Person's Proprietary Signal moved into bull phase yesterday. The VIX, which measures SPY's volatility, is also mixed: bull phase on the psar, bear phase on the pps. A falling VIX is bullish for stocks.
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.
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