Trend following indicators continue to support the uptrend despite the weak volume on the upside. Resistance continues to be the key roadblock (SPX failed twice to beat the 1120 barrier as it closes near 1102).
Contrary signals starting to emerge include the dollar reaching a 50% retracement of its climb from December (and oversold). Considering that the dollar has moved opposite equities, a reversal could spell trouble for stocks. NYMO (NYSE McClellan Oscillator) corrected from an overbought status and is nearing a negative cross of its EMA 20 (a bearish sign). Put/Call ratio is neutral-bearish, but VIX continues to weaken, a positive sign.
Bonds have been particularly strong as rates begin to weaken (recent weakness in the 3-month T-Bill rate is disconcerting).
Our blend of technical indicators suggest caution and a neutral stance.
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