The 60-minute trend is up according to the force index indicator. The nasdaq emini is printing new highs and is moving above the upward channel that has contained prices since the beginning of February. I have a short position on the S&P, but it is a loser after so many consecutive up closes. %b indicator is developing a negative divergence.

Bulls kept bears out of the game for yet another day as the rally powered higher. Small Caps built on their leadership (note relative strength to the Nasdaq) as the MACD trigger line climbed to new 6-month highs. While markets may not necessarily head down tomorrow bulls should be looking for a test of the 20-day MA before another challenge of highs is made.

Bearish Dollar Will Try and Recover Losses Today

Following yesterday's bearish downturn for the U.S. Dollar, the greenback will try and recover some of its losses with the help of several critical economic indicators today. Both the U.S. Trade Balance Report and this week's unemployment claims are likely to have an impact on Dollar positions.

One of the pitfalls of forex blogging (or all financial reporting for that matter) is that it’s inherently after-the fact. In other words, any information about the past – while relevant – is inherently useless, since it has theoretically already been priced into the asset (or currency in this case). Before I begin my post on the Pound’s recent decline and the factors that wrought it, then, I wanted to offer the caveat that in analyzing past events, we must simultaneously look to the future.

Wednesday, March 10, 2010
Stocks Continue to Rally despite Drop in Volatility
U.S. equity markets are trading firm overnight after yesterday’s surge to the upside. Buying pressure dried up late in the session, but no damage was done to the uptrend. Volatility

is falling which is making traders appear complacent. This could be both good and bad. On the good side, it could mean traders are gaining confidence in the recovery which will send prices higher.