*) The SPX closed above 2400 and is confirming the NDX at new highs; this is short-term bullish. The SPX broke out of its narrow range from the past two weeks and made a new closing high aided by strength in financials and energy stocks. Market breadth was strong Monday and argues for more SPX gains into May expiration this weekend. On the breakout in the SPX yesterday, the PM sector may have turned lower. Many gold analysts are calling this a "dead cat bounce" which makes us suspicious that the 5/4 low may have been a major low from a contrarian point of view.
# The SPX and NDX both made new all-time highs yesterday with the SPX finally confirming the NDX in new high ground. More importantly, the SPX has broken out of the tight range for the past two weeks and may be breaking out in a 5th wave higher over the 3/1 high. Our bias is still a run into the 5/19-5/23 turn window. We're anticipating a May to June correction in the SPX before a summer rally. The 5/19-5/23 turn window is key and could be an important timeframe for a possible high.
# The $VIX refused to make new lows today and that may indicate that today's break out in the SPX could be short lived.
# The relative strength of the GDX/GLD ratio argued for the bounce we are seeing in the mining stocks which is dragging gold and silver higher, but the reversal down yesterday could be the start of a retest of recent lows. Gold's test of $1300 on 4/22 put in a weekly high. Gold may retest the 5/4 lows near $1200 going into June but a major low may have been seen on 5/4.
# Crude oil shot higher yesterday and the oil stocks helped the SPX make new all-time highs
# The Dollar declined impulsively into Monday and gave the PM sector a boost. The Euro is testing the highs from last week....