I wasn't expecting much on Thursday but as it turns out some important things happened and has given us some important market tells going forward.


The SPY gapped open to a fractionally new 2010 high, and we chopped around above Wednesdays range until about 2:00 when the market started to rollover.

IWM, IYT and IYR ,for example, bounced hard off their 20 day MA's. We came into those levels vertical on light volume and no news, just the way you want to buy a stock on a pullback/reversal you want to see the same thing in the broader market.

On the afraidtotrade.com blog Corey Rosenbloom wrote an outstanding post about the rounded arc forming on NASDAQ index. In that he wrote about the 2380 level as being significant. The low for the day on the NASDAQ was 2383.77.

These levels were on a lot of people’s radar screens and the market acted the way you would want when we got there. A quick touch or spike down through the number, the sellers get exhausted and then a snap back on decent volume. Thursday’s lows and those moving averages need to be watched closely. If we get back down there again things may not go so well next time.

One of the things that was less obvious was the TLT. Readers of this blog may remember my observations about the 89 level on TLT and the subsequent market selloff's. I almost missed it but TLT closed below 89 on the weekly chart for the first time since the week of 10/12/07 the same week as the all time high in the SPY.

I am not suggesting that the end is near I am just saying that this is something that merits some close attention. AAPL is at all time highs in front of the Ipad launch with the 3rd largest market cap in the country yet GS can barely bounce off of its 150 day MA. Is one of these stocks the canary in the coal mine?

I will continue to closely monitor the dollar index and the TLT. Is the selloff in the bond market going to continue, and if so what implications do those higher rates have. Or could we have something similar to 2007 a rally in the bond market and a big selloff in equities.

The FOMC minutes are due out at 2:00 Tuesday and could easily affect the markets.

I think a lot of kids are out of school next week and that could lead to lower volumes and choppiness so don’t press.

aa 14.82 long

abfs 30.45 long

gww 110 long

hrs 48 long

intu 35 long

sun 31 long

mon 70 short

cf 91.17 reversal/support buy on 150 day MA

stx 17.06 reversal/support buy on 150 day MA

swks 14.86 reversal/support buy on 50 day MA

wcrx 24.72 reversal/support buy on 150 day MA