SPY Remains in an Uptrend and Overbought

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Treasuries showed some spunk on Thursday as the 20+ Year T-Bond ETF (TLT) bounced back above 117.50. The short-term trend remains down after the support break last week. Broken support turns resistance and it would take follow through above 118.50 to reverse the downtrend. A lot still depends on the Euro and the stock market. Weakness in both would be bullish for treasuries, while strength in both would be bearish.



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The US Dollar Fund (UUP) remains in a short-term freefall. Strength in stocks promotes the risk-on trade, which detracts from the Dollar. The Dollar is also undermined by the Fed's extension of its zero interest rate policy. The ETF remains in a short-term downtrend and is short-term oversold. I am leaving key resistance at 22.42 for now. This is marked by the Raff Regression Channel and broken support. RSI resistance remains in the 50-60 zone. 



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The US Oil Fund (USO) remains a challenging call. First, oil has been underperforming the stock market since the beginning of the year. Second, the Dollar has been moving lower and oil has not moved higher. USO surged with the stock market and metals on Wednesday and early Thursday, but fell back below 38.4 by the close. It is possible that a falling flag of sorts formed yesterday and a break above 38.5 would signal a continuation higher. 



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The Gold SPDR (GLD) extended its advance early Thursday and then consolidated. The overall trend is up, but, as with the stock market, gold is getting overextended on the upside. Broken resistance turns into first support in the 163 area. Key support remains in the 160 area.



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Key Economic Reports:                                           
                   
Fri - Jan 27 - 08:30 - GDP           
Fri - Jan 27 - 09:55 - Michigan Sentiment
Mon - Jan 30 – 08:00 – EU Heads of State Meeting
Mon - Jan 30 – 08:00 – Italian Medium and Long Term Bond Auction

Charts of Interest:    Tuesday and Thursday in separate post. 

This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.