Hope everyone had a nice weekend. We are a little late getting our Monday morning report out – the opening bell just crept up on us as we were making morning checks. Oil, at least at one point earlier today, rose to $70 a barrel after word that China wants to increase its reserves by 160 percent.
Actually, we have been quite focused on China – and over the weekend started working on an article that will be posted here either later today or perhaps tomorrow. Without a doubt, China is a major force that significantly affects the US markets – and China always demands watching.
Friday trading had pretty good volume, but it was a day that was a bit hard to read in a meaningful way because of the Russell rebalancing.
Now we are staring a new quarter in the eye. While the S&P500 raises an eyebrow for a head and shoulders pattern and the number of charts for betting short has been increasing, there remain some sectors or areas of sectors such as Technology that still look pretty okay.
Has there been a day when we haven’t mentioned watching the $USD? But that’s exactly what we are doing, especially as our dollar relates to movement in some of the foreign exchange indexes. A keen eye can sometimes pick up an early hint of which way the market winds are going to blow. And, of course, as always, watching the dollar is always important with respect to the movement in commodities.
Also, we continue to watch gold and silver, including the movement of one compared to the other, not only in watching for good entry points, but again with respect to hints at market direction.
This is not a time to get cocky – we must keep our wits about us as we navigate this market.
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