STRETCHED

After the ramp into the close on the SPX yesterday- the index is stretched again above its SMA 50 by about 10% - and this has been an area where markets have topped out of late-

The VIX also a bit stretched to the downside at more than 5% below its SMA 10-

RSI (2) levels at about 90 on most major indexes- which has also been an area where markets have retreated of late - and check this chart for some FIB areas on the NAZ- which is more stretched to the upside than the SPX.

In addition to the stretch, the momentum indicators may be saying that the run is about done as they are definitely diverging from the price action.

Decision Point with some interesting commentary and looking to follow the path of least resistance;

In addition to a QID trade yesterday - I was in and out of DBA for a nice profit as the commodity trade seems to be back on- I plan on trading bigger in that space as that appears to be a good space for now.

Barrons with a short interview from Stephanie Pomboy of MacroMavens- not that bullish:

"And her Exhibit A is the amount of financial pain being priced into the credit markets. She readily grants that spreads have narrowed, but notes that they remain "far, far wider than they were at the 2003 cycle lows."

The complacent reaction among the investment cognoscenti is that the credit markets are wildly oversold. More likely, she sniffs, it has something to do with the fact that "an overwhelming portion of some $8 trillion in mortgage debt (or 80% of the total) is teetering on the edge of, or in some state of, negative equity."

"As to the Fed's claim that the equity of homeowners as a group stands at 43%, she points out that what the Fed neglects to tell you is that roughly a third of them have their houses free and clear. Lo and behold, some basic arithmetic reveals that 67% of homeowners with mortgages have equity of less than 15%. That, Stephanie comments drily, suggests the "destruction priced into the credit markets hardly seems out of whack with potential reality."

Absent the powerful stimulus provided by the unprecedented boom in housing, she sees a huge hit still in the offing for nonfinancial corporate profits. A worst-case analysis is that such profits would sink to 2003 levels, a further decline of $450 billion, or 54%. Under a less exacting (and frightening) estimate, using their relationship to GDP, they would return to their pre-bubble percentage of 3.5%, which translates into a drop from here of $340 billion, or 41%.

Ron Baron with some stock picks - WYNN PBCT NILE DV;

The magazine also bullish on oil services companies SLB BHI HAL;

THE SURGE

Markets closed higher on some wacky action in the last few moments of today's trade- SPX closed higher by 5 after climbing about 5 points in the final five minutes of trading. Not sure what that was - but I am sure lots of folks were looking at it with mouths wide open- and if you look at volume bars on ES/NQ futures - a surge in the final five minutes.

Strongest sectors- energy, ags, telecom and brokers while real estate, homies, banks, retail and biotech lagged.

NYSE 750 net winners;

NAZ - flat internals;

NDX - 50 GREEN;

OEX- 60 GREEN;

VIX- down 3.3% at 35.3;

TRIN- 1.24 with upside volume a hair better than down and light volume over all;

SPX above 875 yet again - and over bought with RSI (2) levels at/near 90 on NAZ/NDX/SPX /DJIA- so some selling early next week should not surprise any one - and it really didn't look like new money was being put to work today- so we will see if they show on Monday.

THE OPEN

Markets are chopping around to slightly lower this morning with strength in ags, shipping, brokers, metals and fins while weakness in real estate, semis, homies, trannies and junk.

NYSE/NAZ flat internals;

NDX-30 GREEN;

OEX- 40 GREEN;

VIX - flat at 36.65;

TRIN .92 with volume about equal on both sides;

Bought some DBA this morning as the chart looks good and I decided to be on the same side of the trade as Gartman- also bought some QID - as the NQ appears to be the weakest of the major indexes - and looking to add as I agree with KASS - good news now seems to baked in the equity cake.

AROD THE GREAT

Futures are up a bit this morning after the big afternoon sell off- not sure what folks expect but this fish is not expecting any big sell down at this time- beginning of month money coming in on the heels of a new bull market- hmmm.

Futures as follows as at 8.15 eastern:

ES +3.25;

NQ +4.25;

YM +29;

Links yeah got links:

The Trader Mike take;

Another contrary indicator;

Obama at the plate;

Iacocca- it pains me;

One take on BEN;

BESPOKE etf's;

BESPOKE on HYG/IEF;

Sarah the great Twitterer;

Not sure if I should link this but the away message - yikes;

Finally- why would anyone do this- AROD building quite a legacy;

FOUR MONTHS PUNCHED

Year to date numbers on various indexes and specific stocks- some interesting stuff:

SPX -3.4%

DJIA -6.9%

NAZ +8.9%

NDX +15.1%

RUT -2.4%

MID +4.2%

GS +51.7%

MS +46.5%

SGP +35.1%

PFE -22.6%

DRG -13.3%

XLE -4.2%

OIH +22.7%

IYR -11.3%

MSH +23.6%

SMH +15.8%

EWA +4.9%

EFA -6.6%

EWZ +27.6%

BAC -37.8%

C -53.8%

RLX +21.5%

Some pretty interesting stuff as the market as usual is a stock pickers heaven but also an index pickers market as NAZ/NDX way out perform the major large cap indexes-

BEARISH CLOSE

Markets hit their highs early in the day after the futures were flying higher but closed at the flat line on the SPX and below the 875 break out level at 873.

Strongest sectors included- retail, semis, ags, trannies, naz and internets while metals, energy, biotech and banks lagged.

NYSE- 400 net winners;

NAZ - flat internals;

NDX- 70 GREEN;

OEX- 45 GREEN;

VIX - up 1% at 36.4;

TRIN 1.19- with upside volume a hair better than down.

Crude closed flat at $51 and the 10 year note is creeping on up at 3.12%;

SPX still in over bought area with RSI (2) level of 80 - other major indexes in the same vicinity and don't look now but the RUT hit that 500 area this morning and closed about 3% lower from that point.

SPX 875 the break out point from yesterday on the heels of the FED announcement- was rejected yesterday and again today as it looked like clear sailing this morning-

I am not giving up on the bull as for not its a buy the dip market until proven otherwise and there is plenty of support down below these levels-

Dougie - going back to the bear area- but I doubt he will be there for long.

LUNCH CRUNCH

Well for the first time in quite a while - a fade of a gap worked quite well - as the DJIA/SPX flipped to red after a strong move in the pre markets- Currently SPX +1.4, NAZ +16 and DJIA +7.

Strongest sectors- semis, retail, junk, ags, trannies and internets while energy, biotech, metals and homies lag.

NYSE- 700 net green;

NAZ- 450 net greeng;

NDX- 75 GREEN;

OEX- 60 GREEN;

VIX- flat at 36;

TRIN- .87 with upside volume still 2x the down;

SPX right back at 875 and this fish will watching the activity around these levels- I suspect we get another shot higher as the internals stay fairly bullish despite the big sell off.

MORE JIG

Markets are higher yet again but off the best levels of the over night futures session- SPX +13, NAZ +39 and DJIA +110.

Strongest sectors-shippings, semis, retail, ags, trannies and real estate while metals, biotech, homies and telecom lag.

NYSE- 1800 net green;

NAZ - 1250 net green;

NDX- 88 GREEN;

OEX- 83 GREEN;

VIX- down 3% at 34.9;

TRIN .74 with up volume 7x the down;

Crude trading over $50 and down about 25 cents while gold is hammered down another $14;

The RUT 2K futures just crossed the 500 level and - I guess psychologically significant- other wise markets are way over bought and I expect a decent pull back before the day is over-

REAL PRE MARKETS

Early Wednesday morning and the futures are way up - ES +12, NQ +21 and YM +104- and they are off their best levels- I suspect this will be one of the few times of late where a fade works quite well.

In the news- check out the specifics of the latest Obama polls - tells a lot about this country;

Here are the most reputable US companies - an interesting list;

Sell in May - maybe not so fast;

More on AIG - not so genius after all;

Howard on stocktwits.com on youtube;

I guess the days about caring about this stuff are over;

More on the -6.1% GDP;

Any other NHL/NBA teams in trouble?;

THE CLOSE

Markets closed well off their best levels as the FED day produced volatility and higher prices before the 3.00 PM sell off.

SPX +18, NAZ +38 and DJIA +169.

Strong sectors- fins, energy, reits, shipping, small caps and trannies while telecom, internets, semis and brokers lagged.

NYSE-2000 net green;

NAZ- 1500 net green;

NDX/OEX- 85% GREEN;

VIX- lower by 5% at 36.1;

Some smart folks decided to get short into the ramp today as 875 was pierced but didn't hold - and just wondering how many folks will look at this as a failed break out- also note the NDX hit its SMA 200 at 1400 and immediately pulled back and closed more than 1% below at 1382.

RSI (2) levels extended at 85 on SPX, 89 on RUT and 90 on the DJIA.

I had some good trades today with IYR QLD and SSO and will play keep playing the day trade game. Tough to figure out where we open tomorrow - not so difficult to jump on a trend during the day on a pull up/back.

THE FLAT LINE

SPX seems to have hit its head yet again at 875 and in addition to the resistance at that level- major indexes are overbought as witnessed by these RSI (2) levels:

SPY 84

IWM 92

QQQQ 85

Strong sectors - energy, shipping, banks, trannies and small caps while brokers, retail, drugs, internets and telecom lag.

NYSE- 2100 net green;

NAZ - 1500 net green;

NDX/OEX- 90% GREEN;

VIX- lower by 5% at 36;

TRIN- .78 and upside volume about 8x the down;

Still looking for a break higher of the 875 level on the SPX - just looking to sell another rally before the fed mins come out at 2.15- probably a pull back there and another rally higher into the close.

THE OPEN

Markets off to the races on the heels of the ugly GDP news - with the SPX +12 NAZ +25 and DJIA +106+.

Strongest sectors - banks, shipping, fins, reits, energy and homies while brokers, drugs, retail and ags lag.

NYSE- 1700 net green;

NAZ- 1000 net green;

NDX/OEX- almost 85% green;

WINNERS- LIFE LOGI ATVI MICC CMCSA DISH RYAAY LBTYA CTSH INFY TWX BHI C BAC GD COF DIS HON;

LOSERS- BMY UNH GILD AMZN NIKE CVS ABT ESRX VRTX RIMM WCRX TEVA NVDA PPDI ORLY;

TRIN - .72 with 8/1 up to down volume on NYSE;

Looking to buy pullback as I have starter positions in IYR and SSO- suspecting we move back to test the SPX 875 level - and don't want to be left with out some profits on the move.

THE RUSH

Futures are trading higher shortly before the open despite a worse than expected first q GDP number.

ES +7;

NQ +10;

YM +50;

Gold +$4 at $898 and crude at $50.4;

Trading green this morning includes- IYR BAC MA V WFC CME MS GS FCX BHP COST OIH GOOG RIMM;

Apparently Rush had some fine words for Arlen- kind of comical - what happens if Collins and Olympia decide to switch?;

High Noon for Ken Lewis;

The WMD;

BESPOKE on some 52 week highs;

GM - not such good news;

CLOSING CHOP

A choppy day to say the least as most on the stockstwits.com site seem to have had some trouble making some dough today- the fish - also with some losses on an early QLD trade and a small winner on IYR.

SPX -2.5 and NAZ -6 while the DJIA was -8.

Strongest sectors- biotech, real estate, telecom, small caps and retail while metals, fins, energy and homies lagged.

NYSE flat internals while the NAZ had about 400 more winners than losers.

VIX- flattish at 38;

TRIN 1.6 while the down volume was a little ahead of up while overall volume was very light.

In the middle of the range yet again with the RSI (2) numbers at near 50 on most major indexes- hopefully we can trend one way or another for the next three days of the week.

MIDDAY CHOP

Looks like a real chop fest- as markets vacillate between green and red with SPX/DJIA/RUT leading and the NDX/NAZ lagging.

Strongest sectors- real estate, biotech, telecom, brokers and small caps while metals, fins, energy and homies lag.

NYSE- 400 net green;

NAZ -400 net green;

NDX/OEX- half green;

VIX- down 1% at 37.9;

TRIN- 1.53 with a volume slanted to the downside;

Still looking for a ramp to the upside into the close and waiting for a good spot to reload the SSO NAZ lagging and flipping to the SPOOOZ.

OPENING FLIP

Markets open lower but quickly turn to the flat line on the heels of some good news from IBM and a better then expected consumer confidence number.

The SPX flat. NAZ +3 and DJIA +8.

NYSE- flat internals;

NAZ - a few more winners than losers;

NDX- 50 GREEN;

OEX- 60 GREEN;

VIX- flat at 38.5;

TRIN 1.5 with more decliners than advancers;

Markets turned up on some good company specific news and the confidence number - now some folks wondering if the end of month drag up will start and get us at least back to the SPX 875 number-

Looking to buy em here as I suspect a nice move higher on the day is only beginning.

THE STRESS

Futures way down this morning on the heels of BAC/C appearing to flunk their recent stress tests - and is anyone surprised?

ES- 15;

NQ -17;

YM -116;

Note that if the markets open where they now trade- they will have moved sideways for the month of April despite being +27% from the March 6 bottom;

DR. Brett- checking around for some trading signals and looking at the HYG;

Jon Weil with another take on the guys running the show;

A local retailer heading to chapter 22;

Forbes with an interesting take on the Best places to live- hint- nothing on this end;

Tina Brown with her take on the Portfolio;

MS employees - not so shrewd;

The turnabout in China;

And Woody Allen back in the news;

THE CLOSE

Markets ended the day near the lows with the SPX off 8.72 and the NAZ down 15.

Strongest sectors included drugs, utils, biotech and metals while real estate, shipping, banks, steel and gaming lagged.

NYSE- 1100 net losers;

NAZ-870 net losers;

NDX- 30 GREEN;

OEX- 40 GREEN;

VIX- up 4% at 38.3 and and about 3% above the SMA 10;

RSI (2) levels - smack in the middle with SPX at 50 NDX at 80 and the RUT at 41;

In the after markets- ES- 5 NQ -6 and YM -40 as at 6.30 EST.

Still looking at SPX 840 as a place for a longer term buy on SSO while day trading is going pretty well. Fari still expecting 1400 on the NDX (30 points North and also the SMA 200) not sure that is coming this week despite turn around Tuesday tomorrow.

Some links for today:

BLM back in the news as it looks like many folks will be giving back some of their distributions;

VIX + MORE with his chart of the week and those numbers aren't todays business but maybe soon;

The latest stuff on Sentiment;

And when does this end?;

Finally- Dr. Brett with a small cap take;

THE EXCERCISE

Heading out a bit before the close as the weather is too good and I need the exercise on the bike.

Expecting the markets to bounce around at these levels and probably drift lower-

Real estate a pretty good tell earlier in the day that the rally would not last- it was down while everything else was rallying and note SRS now at/near the high of day - good info for the future.

Tomorrow is of course turnaround Tuesday and if it isn't expect buyers to show at the 840 level on the SPX which is the EMA 20- and that has been a pretty pretty good buying area over the last several weeks.

AFTERNOON SWOON

Markets selling off again as we get an earthquake in Mexico City- the SPX -5.5 and the NAZ -7.

Strongest sectors- drugs, utils and biotech while real estate, gaming, shipping and trannies lag.

NYSE- 950 net losers;

NAZ- 670 net losers;

NDX- 40 GREEN;

OEX- 45 GREEN;

VIX - higher by 5% at 38.6;

TRIN- 1.29 - down volume 2.5X the upg;

Gold down $4 and crude down $2.4 at 49+;

Had a nice trade earlier on the ramp of the QLD up to the R1 level and also sold my DIG and now watching for another potential long trade into the early afternoon.

Real estate acting ugly and lots of twitters long the SRS - see Todd S.

THE PULLBACKS

Markets open lower but are well off their worst levels as the SPX is -3 and the NAZ -4.

Strong sectors- biotech, drugs, utils, metals and semis while steel, ags, energy and trannies lag.

NYSE- 1,000 net losers;

NAZ- 690 net losers;

NDX- 30 GREEN;

OEX- 40 GREEN;

VIX- up about 5% at 38.6;

TRIN- .89 with down volume about double the up;

Gold down $4 and crude down about $2.5;

Looking for markets to gather strength as buy the down openings are the general for bull markets- and until proven different - this is now a bull market on the shorter time frames.

Bought DIG and QLD this morning and will hopefully dole them out into strength as the day numbers move up.

PRE MARKET LOOK

Markets set to open way lower on the heels of the swine flu outbreak- I think we have seen this movie before- SARS and Bird Flu- selling into the flu breakout wasn't very profitable then and I doubt it is the way to go today.

ES futures down 16;

NQ down 21;

YM down 138;

if you think the EMA 20 is a good place to buy the dip - SPX 841 is the spot for now;

GM trying to get the bondholders to swap out for equity and dumping Pontiac brand leaving them with Buick, Saturn, Chevrolet and GMAC-

Other stuff:

More from Bloomberg on the insider selling;

Smart Money and the twitterers;

World stocks - lower;

The battle continues between the two losers- Thain and Lewis;

GS right back at it;

Grading the NFL draft;

Finally some tidbits from MER:

Spain's unemployment rate just hit crisis levels of 17.4% (up from 13.9% a year ago) as the level of joblessness crossed over the four-million mark. But there was good news in Italy where consumer confidence bounced in April to a 16-month high (104.9 in April from 99.8 in March). And, Germany's consumer confidence index in April held at 2.5 (consensus was 2.3). UK mortgage approvals, however, suffered a 6.9% setback in March, snuffing out a three-month recovery.

Gold gets some Chinese support: Well, this time it was a case of the news making the market, as bullion surged to a three-week high on the report that China's gold reserves had risen 454 metric tons since 2003 to 1,054 tons (76% more than the country had previously reported!). China is now the world's fifth largest holder of the yellow metal.

Two factors underpinning the equity market: First, on the fundamental front, 60% of companies reporting thus far for 1Q have beaten expectations versus 55% for 4Q (see Kopin Tan on page M5 of Barron's). And on the technical front, short-covering remains a primary source of support -- short interest on the NYSE dropped 2.9% in the second half of April and by 5.8% on the Nasdaq.

Finally- how long before the guy in the picture hits the unemployment stats.

FUN WEEKEND STUFF

Nice to be back after a few days at the beach and on the bike fighting the ocean winds.

Markets were very strong on Friday as folks seemed to like the stress test - concluding - well maybe not that much stress as the SPX closed higher by 14.3 and the NAZ +42.

For the week upcoming - a few things- firstly- as usual markets are over bought and near lots of resistance at SPX 875 - RSI (2) levels on the major indexes:

SPX 84

NAZ 93

NDX 93

RUT 80

MID 86

IYR 85

IYF 77

MSH 95

XLE 88

VIX trading at/near the SMA 10- so no sell signals there- if that means anything;

My take- let the price action tell - and if we get up to 1,400 and break 875 on the SPX I will be selling- round number and down sloping EMA.

Some reading materials- the new Stocktwits star with a take a target of NDX 1400 - which seems reasonable and checking the chart above - a pullback to the EMA 20 - probably a good spot for under invested folks to load the boat.

Dr. Brett also seeing a running of the bulls;

Insiders- not so much;

Some economists- yeah - the worst is over;

Muni defaults en route- and probably an eventual big bailout?

Wait till this starts to get some legs;

TWEEPME if you want to pay for followers;