I Can Saw A Woman In Two But You Won't Want to Look When I Do

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For My Next Trick I’ll Need A Volunteer Warren Zevon

Looks like the market is singing Stairway to Heaven-but the temptation to use the stairway up, elevator down phrase is way too tempting so instead I will write, day 3 of follow through in the S&P 500 breakaway gap pattern!

Isn’t that better? How about this: The Russell 2000s closed back above the 50 DMA, giving the bulls a bit more breathing room. Or this, NASDAQ ends with a new 2014 closing high!

Headlines sound amazing, true. Looking around at the sectors-only 2 major sectors are not in a bullish phase: Retail (Bearish) and Regional Banks (Distribution). Both measure an interesting underbelly of the economy-what people buy and how much activity is going on in the local banks. A major barometer? I always have to say I am not an economist, but I do find the lag interesting since it directly looks at the masses and their sentiment.

The TLTs put in another new high and reversed with some large call selling early on in the session. Are we finally at that inflection point? Further proof is needed, but don’t stop watching.

I would imagine May will go out totally the opposite of the sell and go away cliché. June-stay tuned!!

S&P 500 (SPY) Last breakaway gap lasted 14 trading days. This is overbought but not that ridiculously so-only a gap lower would make everyone really jumpy.

Russell 2000 (IWM) Unconfirmed bull phase-has to stick over the 50 DMA

Dow (DIA) Close to the highs at 167.29, but has to get there-166 minor support

Nasdaq (QQQ) 91.36 is the 2014 high to clear-gap lower, we can talk possible double top

XLF (Financials) Holding pattern here with really low volume-as if its deciding which way the market goes before it responds in kind

SMH (Semiconductors) 46.59 the high of 2014 or this just rallied to it and that’s that

IYT (Transportation) Reverse hammer doji-watch this too-could mean was forced up at the end of the session

IBB (Biotechnology) Did ok, but didn’t wow me

XRT (Retail) Inside day just under the moving averages-can go either way from here

IYR (Real Estate) Consolidating

ITB (US Home Construction) Good action after a scary candle on Wednesday

GLD Reversal hammer candle as if forced down

USO (US Oil Fund) Held on to the fast moving average-looks good still

OIH (Oil Services) New 2014 highs

XLE (Energy) After 4 days of tight compression made new highs

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs Maybe a reversal from new highs, we have seen this before but not for very long-here goes my “Boy Who Cried Wolf” Theory-one day!!

UUP (Dollar Bull) Cleared 21.50 and looks ready to go higher

KRE (Regional Banks) If this clears the 200 DMA, could see some nice catching up