Thursday Update

Major indices continue to trend lower. Much attention has focused on head and shoulders topping patterns in DIA and SPY; lower highs and declining relative strength underscore the downtrend. Put/Call 5-day EMA has closed above 1.0, however, the P/C reading is not at an overbought extreme (which could build confidence in a bounce). Commodities have firmed (albeit for a couple of days, although their 50% correction of gains from March could suggest a favorable risk/reward for longs) as the dollar weakens.