Again, it’s the same story on the S&P:



The picture will continue to be bullish until we break out of that channel. Take note of that continuing drop in GDP, though. The fundamentals certainly have not improved enough to sustain this rally into the coming months.

Also, we’ve added a new article to the Seeking Alpha, so check that out if you get a chance.

Good luck.

Today’s buying kept us within the recent trading channel. Let’s see if the current strength will hold into the remainder of the week. We’ll be watching for a break of that trend-line to start looking short again.

Good luck.

As many of you may know, we have been very bearish on the market for some time. However, based upon last weeks action, we believe we may be in for a more substantial rally here:



As long as we remain within the channel, the bullish sentiment will probably continue.



The refiners are beginning to show some signs of life here. After breaking out of a descending wedge, VLO could move higher. The 200 day isn’t all that far away.



TSO is also looking bullish.



The leading catalyst for our most recent change in market tone has to be Wells Fargo’s earnings beat that they posted last week. The stock had a great pennant breakout on heavy volume and looks as though it could move higher. Let’s not get ahead of ourselves though: what happens when you throw hundreds of billions of taxpayer dollars at “too big to fail banks,” then proceed to lower interest rates and completely change the accounting rules in the process? Presto! You get a surprise earnings beat. Eventually this run on the banks will come to a miserable end, but we’ll take it while it lasts.



Gold has been trading in a downtrending channel for the past few months now. As long as the market continues to rally, Gold will probably stay within this channel.



However, that inverse head and shoulders is still in play for now. Let’s wait and see if that right shoulder continues to form over these next few weeks.

Good luck.

/ES hourly trends remain intact:



Don’t fight the tape. This rally is for real. 860 looks to be the next target. We won’t be looking to get short unless that uptrend breaks and as long as the financials perform, this market will go higher.

A few interesting looking daily charts:



Given how extended this market is, one would assume C breaks to the downside.



WFC also looks culprit. Anyone willing to take a bet before earnings? However these break, expect a big move.



VLO looks to be on the verge of breaking out of that wedge. Take note that this is on a yearly chart, meaning a break will likely lead to a big move higher. Keep an eye on the daily chart for clues as to how this one plays out.

Good luck.

This market continues to surprise bears these days. We’ve had a tremendous rally and while the daily charts don’t show any signs of fading, the longer term charts are going to be giving us some fairly hefty resistance levels to deal with:



The area around 845-850 should be an area where bears put up a fight. Should we break above it, 900 would be the next target, but we wouldn’t be buyers of much at these levels. Anyone that’s getting long now is far too late, as the meat of this move is probably gone.



The daily charts still look strong. We’d watch for a break of that trendline to maybe head lower. Again, we wouldn’t be buyers of anything up here, unless we get some decent earnings news that is.



With regards to Gold, we have been seeing a bit of a pullback since that massive volume day in mid-March. Anyone that reads this blog on a regular basis will know that Gold has been a great chart to trade over the past few months. In our view, the break below the 50-day is a bit surprising, but not entirely worrying. The fundamentals are still in place for the inflation trade, not to mention as a hard currency trade. And given the fact that the IMF just proposed pumping 1.1 trillion into the worldwide economy, surely inflation is on the horizon. Of course, we still have to climb our way out of our current deflationary spiral, but you get the point.

One thing to take note of: As the price of Gold has fallen, investors have actually acculated shares of the GLD. This divergence between price and accumulation of shares is definitely bullish for the longer term. Prices for the GLD could continue to fall a bit further going into next week just based on the terrible looking daily charts, but that really shouldn’t last too long. At the very most we could see a test of $85, but we would wait for buyers to step back in around these levels before we start looking for another leg up.

And that’s about it. As you can tell, we’re not very optomistic about this rally lasting much longer, especially since earnings season is just around the corner. If earnings are anything similar to the economic data we’ve been getting lately, then we could very well see a selloff going into the summer months.

Trade accordingly.