1. SP500 – the rally since Thursday has kept both bull and bear cases open:
Gold, gold miners and treasury bonds continue to attract money flows despite the stock market rally of the last few days. I have added to my short stock index positions today and will add more if we move higher still. Based on the indicators in my last post and this, I expect the rally to top out imminently and revisit the lows of last week. At that point we can review to see if indicators have washed out more thoroughly. Based on bigger picture indicators I don’t expect the market to recover from there, but first we can judge that nearer term picture for clues. I would stop adding shorts if US indices rallied back up to their highs on good breadth, volume and renewed cyclical strength, with accompanying weakness in gold and treasuries. Yellen speaking today and likely some market reaction to her overall tone.