2/25 Morningline

Blue chip stocks (SPY) broke below their range of the last two days, gapping down 1.4% at the open. The retracement from the Jan. 14 high of $115.14 to the Feb. 4 low of $104.58 was in the neighborhood of a Fibonacci 61.8%.
Treasury long-term bonds (TLT) gapped up half a percent. Higher bond prices mean an expectation of lower interest rates.

The "fear index" on the S&P 500 (VIX) was up sharply, trading 11% above Wednesday's close.

2/24 Watchlist

Very little movement of the indicators after the two 10 a.m. Eastern events, Bernanke's testimony on the Hill and the new home sales report.

Blue chip stocks (SPY) are contained within yesterday's trading range. Treasury 20- and 30-year bonds (TLT) have dropped back to within the upper reaches of yesterday's range.

Only oil (USO) is on the move, rising to 0.8% above yesterday's close and traversing 2.1% today, low to high. The weekly petroleum inventory report came out at 10:30 a.m.

2/24 Morningline

Fed Chair Bernanke, in prepared testimony released a half hour after the markets opened, again delivered the one-two punch that has been his main message of late:

Ka-pow! "The FOMC continues to anticipate that economic conditions--including low rates of resource utilization, subdued inflation trends, and stable inflation expectations--are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

Bam! "...the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures. Notwithstanding the substantial increase in the size of its balance sheet associated with its purchases of Treasury and agency securities, we are confident that we have the tools we need to firm the stance of monetary policy at the appropriate time."

2/23 Watchlist

Blue chips stocks (SPY) have retraced slightly from today's low, and long-term Treasury bonds (TLT) have broken out of the recent range.

SPY was trading 1.6% below the near-term high st Monday, at an area of support set in late January. If it can break down past that level, then the next support is from $108 to $106, or 1.7% below the current price.

TLT has traversed 1.4% low to high so far today. The higher price for these 20- and 30-year Treasuries mean an expectation of lower interest rates. The media narrative gives great credence to a disappointing consumer confidence survey released before the market open, and in the case of TLT, I suspect that's a valid analysis.

POT pullback confirms downtrend

The Canadian potash company POT is showing a sharp decline today after the money flow index moved into oversold territory yesterday. The stock was once the darling of long-term bull trend players but has since fallen -- both in price and out of favor.

POT is trading at $110.39, off 4.8% from the high set yesterday. The move gives POT a lower high than the $126.47 set on Jan. 11. There was a lower low on Jan. 29, so in combination, it certainly looks like a downtrend.

12/11 Watchlist

BMY rose again today after a bull signal at yesterday's close. It has been in an aggressive uptrend since late October and has about $2 to go until it hits upside resistance set in January 2008. (Yes, I pegged it as a sideways trend in yesterday's Watchlist. I broadened by view.) It's looking interesting as a possible play.
BAX, a bull signal yesterday that looked interesting but which I didn't trade, has shown a strong rise for the second day and has pierced resistance set in September.

New signals among other high-volume stocks and etfs, with the direction of the signal and the trend in which it has occurred:

• ORCL, bull, uptrend since March, sideways since October.
• SMH, bear, uptrend since March
• HD, bull, uptrend since March (trading at resistance)
• CTL, bull, uptrend since March (whipsaw from bear signal given three days earlier)
• BRCM, bear, uptrend since March (strong reversal at resistance)
• DIA, bull, uptrend since March, sideways since November (trading at resistance, whipsaw from a bear signal given four days earlier)
• XRT, bull, downtrend since October
• POT, bear, uptrend since October
• AXP, bull, uptrend since March (about $4 away from upside resistance, but this is the fifth signal given in 11 days, so clearly the stock in neither a bull nor a bear but a confused puppy)
  

Of those, AXP is interesting because of the distance from resistance, but the false signals worry me.

Holdings:

UNG, a covered call (-c9) that expires in eight days, has fallen to 9.53 and remains profitable.

Of the January expiry holdings, there are no new signals.

X, a bear spread (-c40/c41), which has moved contrary to my bearish position, is pulling back a bit but remains worrisome.

AET, a bull spread (p31/-p32) that showed a nice rise this morning, has pulled back to within yesteday's trading range.

HPQ, a bull spread (p49/-p50), is stalled at the cusp of profitability.

KO, an iron condor (p50/-p52.5/-c57.5/c60) remains above the range of max profit at expiration.

No new signals among the indicators.