5/5 Morningline: Stocks and Bonds

At the market open, blue-chip stocks (SPY) were trading 1.2% below Tuesday's close, and then bounced back. The price remains within an area of sideways congestion traced last March.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SPY $116.71
VIX 26.29
TLT $94.27

At 10:01 a.m. Eastern

The "fear index" (VIX) was up by more than 14%, to the top of its February range, before it began a retreat that may, or may not, prove ephermeral. The conventional wisdom is, the higher the VIX, the greater the prospects for lower price on the S&P 500 index.

Treasury long-term bonds (TLT) were trading higher by 1.4%, at levels last seen in December, before retracing. Higher bond prices suggest an expectation of lower interest rates.

What typically happens after a sharp decline, like yesterday's, is that the morning after, the downtrend continues, and then buying pressure begins to increase, as the lower prices look attractive, leading to a price rise.

That's what's happening so far. No guarantees, however, that it will continue through the day. Sometimes it doesn't happen that way.

The Greek debt crisis causes weaker euro hurting U.S. exports scenario, the present narrative, would typically play out like this: The eurozone countries act swiftly to restore confidence in the markets, and U.S. market attention returns to domestic concerns, such as Friday's employment release.

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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

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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