Stock Market: What are the Conflicting Signals?

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There are conflicting signals and a tug of war. First, there is the impressive hold of the August lows and a return to the channel that had broken down in the indexes (SPY chart illustrates). Then, there is the phase-clearly still negative except for the QQQ which went back to recovery although unconfirmed. Then there is slope of the 50 DMA all still negative. Then there is the volume-SPY IWM DIA had an accumulation day, QQQ had one yesterday not today. Overall though, volume is light. Then the leaders AAPL AMZN-down today. At this point, the rally has been led by beaten up stocks and sectors/groups that were oversold. Plus a couple of ones that had good setups like IBM. Consumer confidence remains low.

The "twist" flattened the yield curve which is non-inflationary, but commodity related stocks rallied with the strength. Banks firmed as well. European worries still loom. It seems that if European worries are put to bed, a rally in instruments that will benefit from the twist will prevail. GLD should drop. Right now, if you are a longer term trader, the next big move is unclear.

SPY 121 is the 50 DMA to watch with 116.40 first area of support and 114.50 the 200 weekly moving average major support.

DIA 114.73 the 50 DMA, first support 110.70, then 108.00.

QQQ In weak unconfirmed recovery phase. 54.86 the 50 DMA which if breaks will look ominous, overhead at the 200 DMA 56.30.

IWM 65.30 the 200 weekly moving average support. Overhead resistance at 71.80 the 50 DMA

ETFs:

GLD If breaks 159.60 considering the potential double top still in play overhead, could see more downside with eventual test of the 200 DMA. If firms to 165, would also considering selling the strength.

SMH 30.00 big area now to hold if this can continue to lead.

IYR 52.40 held but still underperformed the market. Until it clears 56.00 the possible double bottom looks like that- a possibility only.

IYT Crossed 200 weekly moving average. A close over 80.00 next hurdle, otherwise back under that moving average- trouble.

XLF The real trend reversal is over 13.50. Needs to hold above 12.00.

TLT**Landed on the 10 DMA. 118.89 fills the gap.

OIH Has more work to do since it still has a gap to 118, the August low to fill if we are looking at anything like a bottom. Otherwise, working off oversold conditions only and under 111.60 looks vulnerable.

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