Standoff!

Even with futures prices soaring before the open yesterday the bulls could not push cash S&P500 prices to a new high yesterday. The tug of war between the bulls and bears has now gone on for seven sessions. The boundaries of the fight are well depicted by the TD Supply and Demand Lines (the red and green dashed lines on today’s chart). The Supply line was at 950.59 yesterday and our high was 949.77. The Demand line was at 928.17 and our low at 927.97. However, because today’s open will undoubtedly be above 928.17 we will not confirm yesterday’s qualified Demand Line break and the standoff continues.

The bond market is certainly of interest lately. Analyzing the 10 year yield I have a Qualified TD Sequential 9-13-9 Buy on the Quarterly chart as of March 31. Of course rates (yield) have surged since then. On the monthly chart the yield low of 2.038% in December 2008 was followed by a technical “buy” signal in February 2009. There is a fair possibility that interest rates have made a secular low, which would provide a drag on equities over the coming months. On the weekly chart the yield is challenging TDST resistance now.