Stock Trading: The TLT Chart and Interest Rates

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Those of my subscribers who carried home several of the recommended longs from last week such as BIIB, CL, MCP, had a good start to the day. Then, with a relatively orderly open, we had an opportunity to get into long CELG, AET, TIF and short GS recommendations coming into today.

Now, SPY closed up .5% not only holding the 200 day moving average but also Friday's low however, could not take out the highs from last Thursday and Friday. With no significant volume pattern, must now see a move above these recent highs or it will look like another short-lived rally. Then, look for signs of it rolling over with the possibility of eventually taking out the 200 day moving average.

QQQ in its weaker distribution phase, also closed up on the day and held last Thursday and Friday lows, and notably had an inside day. That means that a break now would not be healthy.

IWM at this point can go either way as the 50 day moving average continues to decline in slope, yet the price pattern is in consolidation. Over last week's high and we should go up to the adaptive moving average. But under last Friday's low, similar to SPY, we will not only test the 200 day moving average but most likely trade beneath it.

ETF's: XRT was indeed the bright spot closing up 1.7%. Somewhat troubling is the lack of volume. Now, Friday's hi corresponds well with the adaptive moving average. If this can stay up over the 51 area that would be positive and most likely means that we would continue to see a move up at least to test the 50 day moving average. But, if it breaks 51, our beacon will start to dim.

Equally bright was IYR. Similarly, if it holds we could possibly see more movement to the upside to the 50 day moving average.

SMH had an inside day remaining in its current distribution phase with light volume. IBB also had an inside day. Both of those ETF's will be worth keeping an eye on as clues for next direction.

TLT if there is one thing that can help the market from selling off, it's declining interest rates. Looking at TLT, the 50 DMA crossed over the exponential and looks like it is approaching a cross over the 200 although still a bit of distance away. The 10 day moving average is just above today's low. If the price remains above that level I would not be surprised to see this ETF climb up first to 99.27. Although hard to believe, just looking at the technical formation, it does seem that the interest rates are indeed headed lower.

So there you have it. Lots of negative indications, some charts going completely counter and continued volatility which is keeping our trading momentum based, taking profits along the way and keeping risks relatively tight.

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