Well I know a few weeks ago I said to keep a close watch for GS at 160 resistance level for possible signs of a rollover, and thus the broader market will take a dive. I also mentioned to be on the lookout for a possible "reverse the reversal" for a move higher. Well it appears that we have done the reverse the reversal, and GS has blown by the 160 resistance to the upside.
If you take a look at the SPY chart, from the commentary, you will see two arrows one pointing to early February, and one pointing to late February. The "reverse the reversal" came in late February, and a common thing is that the market tried to sell off significantly, only for buyers to come in later in the day to either push the market to positive, or significantly higher than the days lows. These type of days also come with high volume, and therefore days like those usually tell that the market is ready to rally, and that does turn out to be the case. Also the US dollar looks very tired, and appears to be ready to roll over and die any day, thus supporting higher stock and commodity prices.
So now what? Well the market does seem short term toppy, so a minor pullback will likely be healthy to the bull market to continue. Maybe the US dollar will be able to rally just a bit more to pull the market back a bit (eg. 110.5-111.5 on the SPY) and about 108.5 on GLD. A minor will give a nice setup in which to go long, of course with appropriate stops. Because really who knows whether this minor pullback actually becomes a major crash down, or continuation to the upside. But with all that printed money around, I am more comfortable to bet on the upside.
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