Always keep 'em guessing into Friday's close!

There always are several ways to look at a market and today is no exception. This is illustrated by articles such as Stock Market Climbing a Wall of Worry by Cetin Hakimoglu, What a Difference a 10% Rally Makes by Bespoke Investment Group, and Great Trades: Why Our Model Sold Longs and Reversed to Shorts by Great Trades - all of these posted via SeekingAlpha. For myself, while I certainly recognize the measureable improvements in market internals such as shown by the McClellan Oscillator, I don't see a basis to sound the "all clear" for the markets. Especially not on a day when the VIX remained above my key trendline and its 200-day moving average and lower Bollinger Band. The latter article by Great Trades also makes some interesting points about market sentiment - underscoring the flashcut to hot optimism shown by the SentimenTrader gauge (which I posted at my UBTNB3 site today, especially after I noticed that Andre Gratian was also pointing it out - thanks Andre!).

Here's a quick chart of the S&P 500, although I haven't added markings to it as I did yesterday - those same comments still apply however. This chart doesn't yet show today's volumes (a bit early for Stockcharts when I downloaded it). Looking at the SPY etf, today's were a bit lighter than yesterday's volumes. And OBV is still not bullish. Clearly better than the volumes off the November 2008 lows, but not enough to guarantee a good trend reversal pattern is on the way. For that matter, a classic trend reversal pattern will have a pullback, then a resumption in direction of the new assumed (hoped?) trend. So swing traders on the daily charts are most likely on the sidelines, or if front-running the action based on the types of chart pattern and indicators we were discussing almost exactly a week ago, were either selling longs; or at the very least, tightening stops. No reason to wade in and lock in until serious confirmation of a trend change.


Some other markets are looking in limbo in a way that may correlate to the indecisive-looking candle (given its position at 20-dma) the market made today, including the Yen and bonds as shown by the TLT etf (see charts below):

Another interesting article about the yen, by the way, is Yen is still a contender at MarketWatch. Now, my own leanings - which I am doing my best to keep as such, and not become biased! - are that the S&P 500 likely has one more low to go, but I'll respect it if it rallies more before that happens. And that the $XJY as well as TLT are both likely to move higher and maybe to new highs. Somehow I've got to resolve that with my leaning that gold also has another high to put in, even though it's been mighty weak about getting there but it needed some amount of pullback so gold may be ready now for a move higher.

I'll post more later and into the weekend. For now, it's just interesting that like many Fridays, this one closed in a way that leaves open some questions about where the market's headed next. Makes it all the more interesting going into an opex week.