Watch The Bonds For Clues....

It was an up trending day with a lower close on the cash S&P500 Tuesday. While the high of the day was just under the weekly chart’s long moving average, the low of the day was contained by the short moving average on the daily chart. This type of waiting activity, trapped between two moving averages, doesn’t tell us much.

Unlike yesterday, another strong rally today would qualify the TD Supply Line (now at 1077.45) and put the bulls in a position to continue their party. However, that weekly Long moving average still has to be reckoned with (still at 1070.6).

Another complicating factor is the 10 year bond yield. Longer-term the bonds look like they want to rally …. Which I think has negative implications for equities in the current economic environment. However, over the shorter-term the 10 year market is at a balance point right now. It is possible that one more rally attempt is at hand. If so it may give the equity bulls one more rally also. So …. Watch the bonds closely here.

Bottom Line: Although certainly not ready to call an end to the bull run from March, I do remain in the bear camp over the near-term, even with Monday‘s strong rally day. At this point it will take a new high to get me to consider turning bullish. 9-13-9 stop at 1084.05; Parabolic SAR at 1077.09. The point where I would say the bull run from March is in trouble is currently at 978.51.