True Colors $SPY $QQQ $IWM $DIA

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The FED showed some true colors in its internal dissention on keeping quantitative easing in place. For quite some time now, we have talked about these low rates as unsustainable. This is why I have bought TBTs on weakness and more recently, the US Dollar. In keeping with the possibility that the FED pulls back, the key to trading this year will be following sectors and groups and individual stocks that will benefit from a firmer dollar and shorting the ones that enjoyed a good run because of the artificially low rates. What this means for the overall market remains to be seen. For now, the improved phases are intact although some near term concern with new highs in Russell 2000 ending near but not on the intraday lows.

S&P 500 (SPY) Could not break out over the 146.50 resistance while 145.25 level good support to hold. Corrections can occur in price and/or time. Ideally want to see January 2 lows hold.

Russell 2000 (IWM) Made a new high and closed near the lows which means just as this index was the best clue for the recent run, could also be the best clue for how much correction we could be in store for.

Dow (DIA) Doji day and only index to close green. Another one like to see the gap low hold.

NASDAQ 100 (QQQ) Could make the case for a reversal on the close after a new multi-month high and weaker close. Follow through to the downside will take this index down further maybe to around 65.66. Otherwise, will have to get above today's high to see 71.00.

ETFs:

GLD Landed on the 200 DMA which means if breaks from here, 158 is next area of support

XLF (Financials)17.12-17.20 is the 2011 high with 16.70 now support to hold

IBB (Biotechnology) Expectation is this will trade in line with market and not outperform like it did in 2012

SMH (Semiconductors) Happy about the breather this took since unless it breaks 32.65 still a fave for 2013.

XRT (Retail) Inside and doji day.

IYT (Transportation) 101 is the target. 96.00 should hold.

IYR (Real Estate) 66.25 resistance. Seems like its resting

USO (US Oil Fund) Tested Wednesday's low at the end of the session which means, a good place to look for a short.

XLE (Energy) Subs: 73.39 is the slingshot high that either has to clear, or a place to look for shorts

TBT (Ultrashort Lehman 20+ Year Treasuries) Called for a bottom last month-looks like the FED making that happen

UUP (Dollar Bull) Closed over the 50 DMA.