"If You Scatter Thorns, Don't Go Barefoot" $SPY $QQQ $IWM $DIA

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4 gaps higher on the indexes this week and although trading the system consistently, my overriding question continues to be “When does the other shoe drop?” I see a strong US Dollar (bullish phase in fact), rates dropping some from their recent highs, 3 out of 4 indexes in a weak warning phase (our friend the small caps-Russell 2000 went into an unconfirmed bullish phase), most important sectors also in warning except for retail and financials-yes important but can be lonely at the top), and, last but not least-a seed change at the Federal Reserve with new candidates lining up for Ben’s job. Tomorrow is Friday-that I am sure of!

S&P 500 (SPY)Hammer doji. Close under the 10 and 50 DMAs-whether you’re wearing Jimmy Choos or Crox, if this cannot get over those moving averages, prepare for bare feet.

Russell 2000 (IWM) Got the phase change, albeit unconfirmed. Now, we need to fill the gap to 98.16 and close above, or this love affair is short-lived

Dow (DIA) Soooo close but not quite over that 150 that would give encouragement

NASDAQ 100 (QQQ)Sort of looks like SPY, only weaker. Under today’s low, trouble

ETFs:

XLF (Financials)Confirmed bullish phase and a monthly close over 19.20 is key

SMH (Semiconductors) 37.60 is important on a lot of levels-it keeps the recent channel breakout on the monthly charts intact and it crossed the 50 DMA. So, if this cannot get and stay there, vulnerable

XRT (Retail) Confirmed bullish phase making today’s low real important

IYT (Transportation) 108.20-108.65 an area to hold. And of course, the 50 DMA is the area to clear

IYR (Real Estate)The day this bottomed, the volume was strong-a mirror to the day it topped out. However, the phase remains weak and the 200 DMA a barrier to cross. Otherwise, good place to go for shorts if market turns.

GLDLanded on the 80 monthly. I almost cannot believe it. Now, 2 big days of 2-3 times the average daily volume. Could be a blow off in the works.

TBT (Ultrashort Lehman 20+ Year Treasuries) 2 day fairly significant correction, but over today’s high, could resurrect.

UUP (Dollar Bull) Confirmed bullish phase. Should hold the 50 DMA now

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